Key points from The Budget 2016

Key points from The Budget 2016

“A budget for the next generation” – George Osborne

Here are the basics and what we think is relevant:

Savings:

  • The lifetime ISA announced – from April 2017 anyone under the age of 40 can set one up, max saving of £4000 each year, for every £4 saved Gov will give you £1 (every year until age of 50). No tax when you withdraw however a small fee (possibly refundable if you add the money back in).
  • £20K ISA allowance (was £15k)

Tax allowance:

  • £11,500 personal tax-free allowance (April 2017)
  • £45,000 higher tax bracket (April 2017)
  • Capital gains tax cut from 28% to 20% (& 10% for lower tax payers)

Small businesses / Entrepreneurs:

  • £1000 a year tax break for people who make money from activities such as renting out rooms on short-term basis, e.g. via AirBnb
  • Action against foreign countries storing products in the UK and not having to pay VAT (we will see an increase in prices for some items on Amazon/eBay etc)
  • Reduce corporation tax (tax on profits of UK companies) further – April 2020 – 17%
  • Stamp duty reduced for small firms on purchasing property
  • Class 2 national insurance contributions scrapped by self-employed workers
  • Doubling Small Business Rate Relief to £15,000 from £6000 and larger businesses from £18,000 > £51,000

Sugar:

Tackling sugar and obesity in children – Sugar levy introduced for companies to pay (companies may pass these on to consumers) – Fruit juice and Milk based excluded – By 2018 – The levy will be spent on sports in schools. And schools will be able to apply for money to extend the school day, with more sports activities.

Education:

  • By 2020 every Primary and Secondary schools to become academies or be in the process
  • Maths to be taught until age of 18

Disability budget ‘to rise by more than £1bn’

Duty

  • Fuel duty freeze to continue (supposedly saving the average driver £75)
  • Beer duty and cider duty to be frozen
  • Spirits & Whiskey duty to be frozen, other alcohol to increase with inflation

Transport / Infrastructure:

  • Manchester and Leeds high-speed rail
  • M62 upgrades
  • Tunnel Manchester > Sheffield
  • A66 / A69 upgrades
  • Cross Rail 1 & 2
  • Severn crossings (Wales) toll to be halved.
  • Flood defences increased – Standard insurance tax increased by 0.5% to cover cost (£700M)

Tackle homelessness:

A promise to tackle the issue (Some details on Guardian website (from yesterday))

Around the UK:

Taxes cut for North Sea oil industry by 10%
New air ambulance service will be created for Northern Ireland.

Where can I read more about this?

The Government website

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