Business & Property:
- The £2,000 Employment Allowance will increase to £3,000 from April 2016 – reducing the cost of employer National Insurance contributions. Not available in 2016/17 if a director is the sole employee.
- The corporation tax rate, which is currently 20% and due to fall to 19% in 2017, will be reduced to 17% from 1 April 2020.
- A major revamp of business rates, permanently doubling the small business rate relief. Businesses with a property with a rateable value of £12,000 and below will receive 100% relief. Businesses with a property with a rateable value between £12,000 and £15,000 will receive tapered relief. As a result, 600,000 small businesses will pay no business rates.
- The VAT registration threshold will increase from £82,000 to £83,000, and the deregistration threshold will rise from £80,000 to £81,000, from 1 April 2016.
- A cut in the main rates of capital gains tax from 2016/17 to 20% for higher and additional rate taxpayers and 10% for other taxpayers. However, the existing rates will continue for gains on residential property and carried interests.
- A restructuring of stamp duty land tax on commercial properties.
- From April 2018, Class 2 National Insurance Contributions for the self-employed will be abolished meaning self-employed workers will only need to pay one type of national insurance if your profit exceeds £8,060.
- Capital allowances on cars, the 100% first year allowance (FYA) for businesses purchasing low emission cars will be extended for a further three years to April 2021. From April 2018 only cars with CO2 emissions of 50g/km will qualify for FYA (currently 75g/km). q
Individuals & Saving
- The launch of a new Lifetime ISA from April 2017 for adults under the age of 40, with a maximum contribution of £4,000 a year and a 25% bonus. The standard ISA investment limit will rise to £20,000 at the same time.
- An increase in the personal allowance for 2017/18 to £11,500 and the higher rate threshold to £45,000.
- Two new £1,000 tax allowances for property income and trading income, starting in April 2017. Individuals with related income below the level of the allowance will no longer need to declare or pay tax on that income. The government said the measure is designed to support “micro-entrepreneurs” driven by “the rapid growth of the digital and sharing economy”.
- Help to Save Individuals in low-income working households (e.g. those receiving Universal Credit) will be able to save up to £50 a month in a Help to Save account and receive a 50% government bonus after two years. Account holders can then choose to continue saving for a further two years’ bonus.
Other budget news:
- A new soft drinks industry levy will be payable by producers and importers of soft drinks that contain added sugar. The new levy will be implemented from April 2018.