George Osborne has presented his 8th Budget and we have summarised the most significant changes that we think will be of most interest to you.
Personal taxation
- The threshold at which people pay 40% income tax will rise from £42,385 now to £45,000 in April 2017
- Capital Gains Tax to be cut from 28% to 20%, and from 18% to 10% for basic-rate taxpayers (excluding residential property)
- Class 2 National Insurance contributions abolished, which the government says gives a tax cut of more than £130 to three million self-employed workers from 2018
Pensions and savings
- Annual Isa limit to rise from £15,240 to £20,000
- New “lifetime” Isa for the under-40s, with government putting in £1 for every £4 saved
- People who save a maximum of £4,000 towards a home deposit or retirement will get a £1,000 top-up from the state every year until they turn 50
Business
- Headline rate of corporation tax – currently 20% – to fall to 17% by 2020
- Annual threshold for 100% relief on business rates for small firms to rise from £6,000 to £12,000 and the higher rate from £18,000 to £51,000, exempting 600,000 firms
- Use of “personal service companies” by public sector employees to reduce tax liabilities to end
- Commercial stamp duty 0% rate on purchases up to £150,000, 2% on next £100,000 and 5% top rate above £250,000. New 2% rate for high-value leases with net present value above £5m. Effective from midnight
Transport
- More than £230m earmarked for road improvements in the north of England, including upgrades to M62
Will the changes within the budget have a personal effect on you or your business? Contact a member of the team on 01925 210 000 and we will be happy to help with any questions.
