George Osborne delivered his eighth Budget announcement as Chancellor of the Exchequer at 12.33pm today. In his speech that lasted 1 hour and 3 minutes he set out his ‘Budget for the working people’ from the ‘Government for the working people’.
Below we have summarised the main points for you:
Our area and the Northern Powerhouse
- Upgrades for the A66 and A69 in Cumbria were announced – with disappointment that the A595 will not receive the funding for upgrades at this time.
- £700million was promised for flood defences including a specific share for Carlisle and Cumbria.
- The tax free personal allowance is set to rise to £11,500 from April 2017
- Higher rate tax threshold set to rise to £45,000 (from £42,385) from April 2017
- From April 2016 Capital Gains Tax will decrease from 28% to 20% (for higher rate payers) and from 18% to 10% (for basic rate payers). Please note that this excludes residential property which will remain chargeable at the 28% and 18% rates.
- There will be a 0.5% rise in insurance premium tax.
Alcohol, tobacco, and fuel
- Great news for motorists as fuel duty will remain frozen for the sixth year in a row.
- Beer, cider, and spirit duties are to be frozen and excise duties on tobacco will rise from midnight tonight by 2% above inflation.
Pensions and savings
- The ISA limit will increase to £20,000 for everyone from April 2017.
- A new Lifetime ISA was announced for those aged under 40. The Government pledges to help you to save for the future offering a 25% government bonus to your savings (offering £1 for every £4 saved in the ISA) meaning you don’t have to choose between saving for a first home, and saving for your retirement.
- A new state-backed savings scheme for lower paid workers was announced offering up to £1,200 over two years.
- The Money Advice Service, which has provided financial advice to consumers since 2010, will be abolished.
- Corporation Tax will fall to 17% by April 2020.
- Class 2 National Insurance abolished from 2018.
- Employer pension contributions are set to rise for employees working in the public sector.
- Taxable termination payments will be subject to Employers National Insurance from 2018.
- The annual threshold for small business tax relief will be raised from £6,000 to a maximum of £15,000 in April 2016, meaning exemption for thousands of firms across the UK.
- People who sell services online, or rent out their homes, will be eligible for two new tax free allowances worth £1,000 a year
- From midnight tonight commercial stamp duty is set to fall – 0% for properties under £150k, 2% for £150-£250 and 5% for over £250k.
Health and education
- By 2022 every school in the country either will be or will be in the process of becoming an academy.
- A new sugar tax has been announced for sugary soft drink producers coming into force in two years’ time. The proceeds of this (which is expected to be £520million), will be spent on primary school sports projects.
Economy and growth
- Employment is growing fastest in the North West with unemployment down overall across the UK and a million jobs forecast to be created by 2020.
- Outlook for global economy is “materially weaker” and UK “not immune” to slowdown elsewhere but the UK will still grow faster than any other major western economy with inflation of 0.7% forecast for 2016 and the country now spending no less than the amount raised in taxes.
For any further information on the announcements made in the 2016 Budget visit our dedicated Budget webpages or contact our specialists on 01228 711888.