Budget Summary Summer 2015

Yesterday George Osborne made the first Conservative budget in 19 years aiming to recognise hard work and build a strong economy by reforming education, reforming welfare, delivering infrastructure and building the Northern Powerhouse.  The prediction in the budget suggested a growing economy following the 3% growth in 2014 with a 2.4% growth predicted for this year. It is also predicted that 1 million extra jobs will be created by 2020.

A summary of the points with in the budget are:

  • New national living wage will be introduced for all workers aged over 25, starting at £7.20 an hour from April 2016 and set to reach £9 by 2020
  • Inheritance tax threshold to increase to £1m, this will be phased in from 2017, underpinned by a new £325,000 family home allowance
  • Personal allowances to rise to £11,000 next year and rising to £12,500 by 2020, meaning people working 30 hours a week on the minimum wage will no longer pay income tax
  • Next year the 40p rate threshold will rise from £42,385 to £43,000
  • Mortgage interest relief for buy-to-let homebuyersto be restricted to the basic rate of income tax
  • Individuals earning over £150,000 will see a reduction in the amount they can contribute to their pension tax-free
  • A major reform to Vehicle Excise Dutiesto fund the maintenance and construction of new roads in England.  New VED bands for brand new cars to be introduced from 2017, pegged to emissions for the first year. Subsequently, 95% of car owners will pay a flat fee of £140 a year
  • Corporation tax is to be cut to 19% in 2017 and 18% in 2020
  • £7.2bn to be raised from the clampdown on tax avoidance and tax evasion with HM Revenue & Customs budget to be increased by £750m
  • From November insurance premium tax is to increase to 9.5%
  • National Insurance employment allowance for small firms is to be increased by 50% to £3,000 from 2016
  • Dividend tax credit is to be replaced with a new tax-free allowance of £5,000 on dividend income. Rates of dividend tax are then set to be at 7.5%, 32.5% and 38.1%
  • Annual investment allowance will be fixed permanently at £200,000 from January 2016
  • NHS will receive a further £8bn by 2020, in addition to the £2bn already announced
  • Control over fire services, planning and children’s services to be handed to consortium of 10 councils in Greater Manchester
  • £30m for a new body, Transport for North, to promote integrated transport including use of Oyster cards in the north of England
  • Rent-a-room relief scheme to rise to £7,500

 

TAX DIARY OF MAIN EVENTS FOR AUGUST / SEPTEMBER 2015

Date What’s Due
1 Aug Corporation tax for year to 31/10/14
19 Aug PAYE & NIC deductions, and CIS return and tax, for month to 5/8/15 (due 22 August if you pay electronically).
1 Sept Corporation tax for year to 30/11/2014
19 Sept PAYE & NIC deductions, and CIS return and tax, for month to 5/9/15 (due 22 September if you pay electronically).

 

To discuss how these changes may affect you and to find out more please get in touch or call 0161 249 5040