Phone: 01206 273908
Email: info @ tayloranddavis.co.uk

Budget 2016

BudgetHighlights from the March 2016 budget report

  • Personal Allowances, the point where someone begins to pays income tax, will rise to £11,000 on the 6th April and £11,500 in April 2017
  • The higher rate Income Tax will increase to £43,000 on the 6th April and then upto £45,000 in April 2017
  • Duty on beer, spirits and most ciders to be frozen
  • New Lifetime ISA tp be introduced from April 2017 for adults under 40 years of age to be used for saving for retirement or home purchases. Individuals can save uptp £4,000 per year and will receive an additional 25% bonus from the Government
  • The annual ISA limit will be increased from £15,240 up to £20,000 per year
  • The National Insurane Employment Allowance will be increased from £2,000 up to £3,000 from April 2016, but only for companies where the director is the sole employee
  • VAT registration threshold will increase from £82,000 to £83,000, with de-registration from £80,000 to £81,000
  • Corporation tax to be reduced from 20% down to17% by 2020
  • Capital gains tax slashed from 28% to 20% for top top rate tax payers, and 18% to 10% for basic rate payers
  • Employers will need to pay Employer's National Insurance contributions on pay-offs (termination payments) that are above £30,000 where income tax is due
  • Class 2 National Insurance contributions for self-employed will be scrapped from April 2018.  From this date, self-employed will only need to pay Class 4 NIC contributions on their profits
  • The main Minimum Wage amount which appplies to workers aged between 21 and 24 will increase to £6.95 in Ocotber 2016
  • The Government plan to cut back on the Salary Sacrifice scheme.  The intention is to keep it available for pension saving, childcare and health realted items such as cycle to work
  • The Government are also going to introduce new measures to tackle disguised remuneration, in particular Employee Benefit Trusts.
  • Rules about the application of IR35 are being tightended in relation to public sector engagements which will make the entity closest to the professional service company potentially responsible for operating PAYE and National Insurance contributions and for Real Time Reporting. This may effectively force small one-man contractors and consultants to become employees if they are to be considered for public sector roles
  • After a review of Travel and Subsistence rules for employers, the Government has decided that existing rules are generally understood and will not be making any further changes

 

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