The first Conservative government budget since November 1996.  Here is a summary of the main announcements that matter to you:

 

Business
  • Permanent non-dom status to be abolished – from April 2017,anyone who has lived in the UK for 15 of the past 20 years will pay same level of tax as other UK citizens.  Speak to our International expert
  • £7.2bn to be raised from clampdown on tax avoidance and tax evasion with HMRC budget increased by £750m.  Read our latest blog to find out how PKB’s Tax Investigation Service can protect you and contact us today
  • Increase in insurance premium tax to 9.5% from November
  • National Insurance employment allowance for small firms to be increased by 50% to £3,000 from 2016.  As an employer, if you have paid £3,000 or more Employee NIC – you will be entitled to £3,000 off your Employer NIC bill.  Contact our expert today
  • Dividend tax credit to be replaced with a new tax-free allowance of £5,000 on dividend income.  Rates of dividend tax to be set at 7.5%, 32.5% and 38.1%
  • Annual investment allowance will be fixed permanently at £200,000 from January 2016

Contact the PKB team to find out how your business will be affected

 

Personal taxation and pay
  • New national living wage will be introduced for all workers aged over 25, starting at £7.50 an hour from April 2016 and set to reach £9 by 2020.
  • Inheritance tax threshold to increase to £1m, phased in from 2017, underpinned by a new £325,000 family home allowance
  • Personal allowance, at which people start paying tax, to rise to £11,000  next year.  Plans to raise the personal allowance to £12,500 by 2020, so that people working 30 hours a week on the minimum wage do not pay income tax
  • The point at which people start paying income tax at the 40p rate to rise from £42,385 to £42,000 next year
  • Mortgage interest relief for buy-to-let homebuyers to be restricted to basic rate of income tax

Speak to our Tax expert for more information on how this will affect you

 

Welfare and pensions
  • Tax credits and Universal credit to be restricted to two children, affecting those born after April 2017
  • Income threshold for tax credits to reduced from £6,420 to £3,850
  • Working-age benefits to be frozen for four years – including tax credits and local housing allowance, but maternity pay and disability benefits exempted
  • The amount people can contribute to their pension tax-free to be reduced for individuals with incomes over £150,000

What does this mean for your household? – talk to our experts to find out

 

 The state of the economy
  • Economy grew by 3% in 2014
  • 2.4% growth forecast in 2015, 0.1% lower than predicted in March, followed by 2.3%, 2.4% and 2.4% the following years
  • One million extra jobs predicted to be created 2020

 

Housing
  • Rent-a-room relief scheme to rise to £7,500

 

PKB Accountants Partners - pkb.co.uk

To find out more – please get in touch.

 


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