Highlights from the July 2015 post election budget

Taxes

• Personal tax allowance, when you start paying tax, to rise to £11,000 next year and to £12,500 by 2020
• The starting point for 40% tax will rise from £42,385 up to £43,00 next year
• Fuel duty has been frozen again
• Insurance premium tax will be increased to 9.5% in November
• Changes to vehicle excise duty (VED) on new vehicles, so more new vehicles pay this tax, with money raised pay for new roads
• Simpler 3 band VED system introduced in 2017 with most cars paying £140 in the standard band
• From April 2016 dividend tax credits will be scrapped and replaced with a simple £5,000 allowance

Business

• National insurance employment allowance to be increased to £3,000 for small firms in 2016
• A new Living Wage to be introduced in April 2016 for workers aged over 25, starting at £7.20 an hour rising to £9 by 2020
• Introduce an apprenticeship levy on large firms to further encourage an increase in apprenticeships
• Mortgage interest tax relief for buy-to-let owners will be restricted to the standard rate of income tax, to be introduced over four years from April 2017
• HMRC have a further £750M to help them combat tax evasion
• Corporation tax to be reduced to 19% in 2017 and down to 18% in 2020

Limited Companies

• Removal of divident tax credits in April 2016 may impact company directors and independent professional
• Consultation on new restrictions on travel and subsistence for one person limited companies and 'umbrella' companies
• HMRC have been asked to make IR35 rules 'more effective' and to increase it's tax yield with a target of £400M
• One person limited companies will no longer qualify for the employment allowance whilst qualifying businesses will see this increase to £3,000

Family

• New £175,000 inheritance tax allowance will be introduced in 2017 allowing homes of up to £1M to be passed to children or grandchildren tax free.  Estates of more than £2M will see this allowance taper away
• 18 to 21 year olds will no longer have an automatic entitlement for housing benefit, to try and encourage either earning or learning
• Up to 30 hours per week free child care for 3-4 year olds from 2017

Benefits

• Working age benefit will be frozen for the next four years to allowing earning growth (working salaries) to catch up again
• Local councils be be empowered to change their own Sunday trading laws
• Annual household benefit cap to be reduced to £23,000 in London and £20,000 for the rest of Britain