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