Category: National Minimum Wage

George Osborne delivered his seventh Budget as chancellor on 8 July 2015

Personal taxation and pay

• 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 – giving an estimated 2.5 million people an average £5,000 rise over five years
• Low Pay Commission to advise on future changes to rates
• Inheritance tax threshold to increase to £1m, phased in from 2017, underpinned by a new £325,000 family home allowance
• Personal allowance, at which people start paying tax, to rise to £11,000 next year (2016-17). The government says the personal allowance will rise to £12,500 by 2020, so that people working 30 hours a week on the minimum wage do not pay income tax
• The point at which people start paying income tax at the 40p rate to rise from £42,385 to £43,000 next year
• Mortgage interest relief for buy-to-let homebuyers to be restricted to basic rate of income tax
• Rent-a-room relief scheme to rise to £7,500

The state of the economy

• Economy grew by 3% in 2014
• 2.4% growth forecast in 2015, 0.1% lower than predicted in March, followed by 2.3%, 2.4% and 2.4% in the following years
• One million extra jobs predicted to be created by 2020

Alcohol, tobacco, gambling and fuel

• No rise in fuel duty this year with rates continuing to be frozen
• – Major reform to vehicle excise duties to pay for a new road-building and maintenance fund 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
• – Alcohol and tobacco duties not mentioned in statement

Business

• Corporation tax to be cut to 19% in 2017 and 18% in 2020
• – Permanent non-dom status to be abolished – from April 2017, anyone who has lived in the UK for 15 of the past 20 years will pay same level of tax as other UK citizens
• – £7.2bn to be raised from clampdown on tax avoidance and tax evasion with HMRC budget increased by £750m
• – Bank levy rate to be gradually reduced over the next six years and a new 8% surcharge on bank profits introduced from 2016
• – Cap on charges imposed by claims management companies and an increase in insurance premium tax to 9.5% from November
• – New apprenticeship levy for large employers
• – Climate Change Levy exemption for renewable electricity to be removed
• – National Insurance employment allowance for small firms to be increased by 50% to £3,000 from 2016
• – Dividend tax credit to be replaced with a new tax-free allowance of £5,000 on dividend income. Rates of dividend tax to be set at 7.5%, 32.5% and 38.1%.
• – Annual investment allowance will be fixed permanently at £200,000 from January 2016
• – A consultation will take place on changing Sunday trading laws