Budget 2016 Summary

Whether the Budget is aimed at putting stability first or the Next Generation first, George Osborne’s eighth Budget included a number of surprise tax announcements. Mr Osborne described his Budget as being “fit for the future”, intended “to keep Britain living within its means”, “against a dangerous cocktail of risks”. Our Budget 2016 summary contains a few of the tax announcements made today although, as always, we will need to wait for the detailed legislation to see exactly what these measures will mean.

 

Budget 2016 Summary

Tax Avoidance

  • Shutting down disguised remuneration schemes;
  • Ensuring the public sector will pay the right amount of tax and not benefit from forcing employment via personal service companies;
  • Fundamental reform of the tax system, including rates and reliefs;
  • Restricted tax relief for interest payments made my large companies in certain circumstances

Personal Tax

  • Tax free personal allowance to increase from £11K in April 2016 to £11.5K from April 2017;
  • Higher rate threshold to increase from £43K in April 2016 to £45K from April 2017;
  • Class 2 national insurance to be abolished from April 2018 (worth £130 pa);
  • ISA limits to be increased from £15K to £20K for everyone from April 2017;
  • New lifetime ISA for the under 40’s, with a 25% contribution coming from the government, with funds to be used for buying a new home or retirement. Maximum contributions of £4K per annum, until the age of 50. Bonus will be lost if not used for a qualifying purpose. No tax on taking funds out;
  • No changes to current pension reliefs.

 

Business Tax

  • Increase in the upfront tax charge on loans made by companies to their owners, from 25% to 32.5% from April;
  • Employer’s national insurance contributions to be charged on termination payments made in excess of £30K from April 2018, with rules on termination payments generally being tightened;
  • Corporation tax to be reduced from 20% to 19% from April 2017, and then to 17% from April 2020 (was previously going to be 18%);
  • A strengthening of withholding tax on royalty payments;
  • Firms to be able to use losses more flexibly, although there will be a restriction on the use of brought forward losses against current year profits from April 2019 to allow businesses time to organise their affairs;
  • To address the unfairness of small companies competing with large companies over the internet;
  • Introduction of tax breaks for micro entity internet businesses and home owners, with a £1K tax free allowance to cover things like shared use of tool, car sharing and renting your driveway out over the internet;
  • Permanent increase in small business rates relief from a rateable value of £6K to £15K;
  • Tax changes for large companies storing goods in the UK and selling these via the internet, avoiding VAT;
  • Funding to be provided for a dramatic improvement in service from HMRC

Budget 2016 Summary- Key facts and figures

Capital Gains Tax

  • Surprise reduction in CGT rates for non business asset disposals, from 18%/28% to 10%/20%, excluding any residential property disposals and carried interest;
  • Extension of entrepreneur’s relief to owners of less than 5% holdings in trading companies, and who may not be a director or employee of the company, where the shares are issued from tomorrow and are held until at least 6 April 2019

Stamp Duty Land Tax

  • Confirmation that the 3% increase in SDLT rates on residential property from April will also apply to large investors;
  • SDLT scheme changes for commercial property, moving away from the current slab system to a tiered system: First £150K at 0%, next £100K at 2%, balance at 5%, effective from midnight tonight, subject to transitional rules;

Other 

  • New sugar tax on large companies operating in the soft drinks industry, excluding any pure fruit or milk drinks, to help fund sports and extended school hours;
  • A further ½% increase in insurance premium tax, to be used on flood defence spending only;
  • Beer and cider duties to be frozen, plus on Scotch whiskey;
  • Fuel duty frozen for sixth year running;
  • Halving of Seventh Crossing toll fees by 2018.

While our Budget 2016 Summary covers the key points, if you’d like to have a more in depth review of what the Budget 2016 means for you or your business please do not hesitate to contact one of our expert Chartered Tax Advisors or alternatively you can book a place at one of our Budget 2016 Breakfast Seminars . You can read The Chancellors speech in full here

 

Budget 2016 Summary

Tuesday 22nd March 2016, 8:00am – 9:30am   The Manor Hotel, 26 Hendford, Yeovil BA20 1TG

Tuesday 22nd March 2016, 8:00am – 9:30am Beachlands Hotel, Uphill Road, Weston super Mare ,Somerset BS23 4NG

Wednesday 23rd March 2016, 8:00am – 9:30am   Weymouth Pavilions, The Esplanade, Weymouth DT4 8ED

Wednesday 23rd March 2016, 8:00am – 9:30am   Taunton Racecourse, Orchard Portman, Taunton TA3 7BL

A light breakfast selection will be available on arrival and our experts will be on hand before and after the seminar to answer any further questions.  Expert speakers include Tracey Watts, Andrew Brown, Sheldon Cole, Dominic Crilly, Tara Hayes and Sam Kirkham

For further  details on how to book your free place, please see the seminar invite.  If you have any questions or would like to book please do not hesitate to contact Rebecca Evans on 01935 423 667 or at Rebecca.Evans@albertgoodman.co.uk. Thanks for reading our Budget 2016 summary

 

 

 

Get started today

Contact us today and speak to our expert team to get started

Contact
close slider