ON March 8, Chancellor Philip Hammond delivered his first Budget.

Later this year he will deliver a second and if I had one overriding impression from last week, it was that this was a “to be continued” Budget.

One announcement on “levelling the playing field” grabbed the headlines; a second on HMRC’s Making Tax Digital (MTD) project received less coverage.

In his Autumn Statement last year, Mr Hammond said that he was concerned about the effect of rapidly rising incorporations and self-employment on tax revenues.

Many commentators took this as a hint that there might be changes to National Insurance for the self-employed. In the Budget, we saw those changes take shape in the form of an increase in the Class 4 National Insurance rate from nine per cent to 10 per cent from April 6 2018 and to 11 per cent from April 6 2019.

Mr Hammond justified the increase as helping to level the playing field between the employed and self-employed.

He went further, saying that those operating through a company also contributed to the lack of a level playing field as they could draw from their company tax-efficiently by way of dividends.

To address this he announced that the £5,000 tax free dividend allowance will fall to £2,000 from April 6 2018.

The tax advantages of trading through a company have changed significantly over recent years and my sense is that there may be more to come on this front.

Turning to MTD, Mr Hammond announced that self-employed people and landlords with annual sales or rent below the VAT threshold will not now be compelled to comply with the MTD requirements until April 2019.

This one year deferral is very welcome as it gives more time for a thorough pilot programme to test the system and for software suppliers to adapt their products to fit the wide range of business types that will fall within MTD.

This now means that from April 2018 businesses and landlords with annual sales or rent above the VAT threshold - and from April 2019 those with sales or rent above £10,000 - will have no choice but to keep their records using apps and accounting software.

Digital business records will be mandatory and handwritten records will be a thing of the past.

If you are in these groups, you should speak to your accountant to find out how you will be affected.

  • Paul Aplin OBE is a tax partner with A C Mole & Sons and Vice President of the Institute of Chartered Accountants in England & Wales; you can follow him on Twitter @PaulAplinOnTax. He and fellow tax partner Amanda Gunter can be contacted on 01823 624450