NMW

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

Category: NMW