Accounting News & Insights
Summer Budget 2015
9th July 2015
Summer Budget 2015
The Chancellor delivered a full Conservative budget this afternoon. He claims the budget puts security first, rewards hard working British people and moves Britain from a low wage, high tax and high welfare economy, to the higher wage, lower tax and low welfare economy.
The following are some key points with details to follow shortly:
- Increase in personal allowance to £11,000 in 2016/17.
- Increase in higher rate threshold to £43,000 in 2016/17.
- Replacing dividend tax credits with a dividend allowance of £5,000 from April 2016.
- Setting dividend tax rates at 7.5% for basic rate taxpayers, 32.5% for higher rate taxpayers and 38.1% for additional rate taxpayers.
- Reduction in corporation tax rate in 2017 to 19% and then to 18% in 2020.
- Reforming rules to stop deduction for annual deduction of costs relating to business reputation and customer relationships.
- Bringing forward instalment payments for large companies from April 2017.
- Increasing the permanent level of annual investment allowance to £200,000 for qualifying capital expenditure made after 31 December 2015.
- Restricting relief on finance cost for buy to let properties. This will be phase in over 4 years starting from April 2017.
- From April 2016, remove wear and tear allowance and replace with deduction of costs actually incurred.
- From April 2017, introduce new rules so that owners of UK residential properties will be subject to inheritance tax.
- From April 2017, individuals who have been resident in the UK for more than 15 years in the last 20 years will be deemed UK domiciled for tax purposes.
- Remove the possibility of claiming non-dom status for individuals born in the UK to UK domiciled parents.
- Introducing a new national living wage at £7.20 for workers aged 25 and above from April 2016. Recognising this will increase business costs, the NIC employment allowance will also increase from £2,000 to £3,000 a year.
- Increasing the inheritance tax nil-rate band annually to £500,000 in 2020/21. Any unused band can be transferred to surviving spouse or civil partner thus effectively raising the band to £1m.
- From April 2016, annual allowance for pension tax will be tapered for those with adjusted annual income over £150,000.
- Limit the amount of benefits an out of work family can receive.
- Limit tax credit support provided to families to two children for children born after April 2017.
- Doubling of free childcare entitlement from September 2017.
- Increasing investments in HMRC’s work on non-compliance and tax evasion by £800m over this Parliament.
- Introduce legislation to give HMRC additional powers to tackle aggressive tax planning such as acquire data from business intermediaries.
- Stopping the use of losses to offset CFC profits.
- Effective immediately, stopping the use tax planning to reduce tax on carried interest.
In the mean time, if you have any queries with regards to the foregoing please do not hesitate to get in touch with us on 01932 830664.
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