Simon Chatterton from S&T Asset Management has prepared a brief summary of Chancellor George Osborne’s March 2016 budget.
Savings & Investment
- ISA
Under 40’s to benefit from April 2017; Government top-up of £1 for every £4 saved in ‘Lifetime ISA’. Benefit will be retained provided ‘specific lifetime events’ are achieved such as buying a home valued up to £450k or monies are used as retirement income.
- ISA
Annual allowance to be increased from £15,240 to £20,000 from April 2017.
- Capital Gains Tax (CGT)
From April 2016 the higher rate of CGT will be cut from 28% to 20%. Basic rate from 18% to 10%.
Income
- Income tax threshold at which workers start paying tax to rise from £10,600 to £11,500 in 2017.
- The level at which 40% tax threshold starts will rise from £42,385 to £45,000 in April 2017.
- Class 2 NICs to be abolished – all self employed to build state pension benefit through class 4 NICS from April 2018.
Business
- Small Business
From April 2017 increase in business rate relief, from £6,000 to £15,000. Currently small businesses occupying property with a rateable value of £6,000 pay no business rates. This increases to £12,000 with tapered relief applying to those up to £15,000.
- Corporation Tax
Main rate of Corporation Tax cut to 17% from 2020.
- Sugar Tax
From 2018 a new two band sugar tax to be introduced – one affecting sugar content above 5g per 100 ml and another targeting those above 8g per 100 ml.
Education
- Every primary and secondary school to become an academy (or in the process of becoming one) by 2020.
- Secondary schools to be offered funding from 2017 to enable them to offer a wider range of activities such as sport. This will be voluntary for the school but compulsory for the pupil.
Transport
- HS3 – £60m to develop plans for Manchester to Leeds link.
- Additional funding to create four lane M62
- £80m to develop plans for Crossrail 2.
Alcohol
- Duty to be frozen on beer, spirits and most ciders.
Fuel
- Duty to be frozen.
Tobacco
- Duty to rise by 2% above inflation as previously stated but an additional 3% duty added to hand rolling tobacco.
