Budget 2016 bullet point summary

Budget 2016 bullet point summary

George Osborne has unveiled his Budget 2016. Below is a bullet point round-up of what was unveiled. The list will be continually updated as more details emerge in the coming days:

Income tax

• On tax evasion there are plans to close disguised remuneration schemes. The public sector will have to ensure employees pay the correct amount of tax and not through Personal Services Companies
• 40% income tax threshold increases from £42,385 to £45,000 from next April
• Personal income tax allowance to increase to £11,500 next year
• there will be two new tax-free £1,000 allowances from April 2017  – one for selling goods or providing services, and one for income from property you own

Capital Gains Tax

• Top capital gains tax rate cut from 28% to 20%. Lower rate for basic rate tax payers to be cut from 18% to 10%

Insurance Premium Tax

• Increased by 0.5%

Corporate tax

• New rules introduced limiting the size of losses that large businesses can offset to reduce their tax bills
• Proposed cut in corporation tax to 17.5% from 20% by 2020
• Changes to commercial stamp duty rates. There will be a 0% band for property up to £150,000. Then a tiered system of 2% on the next £100k and 5% rate above £250k
• Revised thresholds for business rate relief
• New sugar levy to be applied on sugary drinks in two years following consulations

National Insurance

• There will be employer national insurance contributions payable on redundancy payments over £30,000

Pensions

• Nothing announced - tax-free cash lump sum to be kept despite prior rumours

Inheritance tax

• Nothing announced

Savings

• ISA limit to increase from £15,000 to £20,000
• New lifetime ISA to be introduced for under 40s where the Government will give £1 bonus for every £4 saved. Annual allowance of £4,000
• A new saving shceme for low-paid workers was annnounced which could be worth £1,200 over four years

Duty

• Fuel duty frozen for 6th year in a row
• Duty on beer and cider is also frozen
• Duty on tobacco to rise by 2% above inflation

Benefits

• Disability benefits to increase in above rate of inflation