Budget 2016 Highlights

16th March 2016

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These are the major changes announced in the 2016 Budget.

If you need any advice on how the Budget affects you contact Andrew Gane for personal finance advice and Margaret Turner for how this affects your business and accounts.

Personal allowance

The tax free personal allowance will rise to £11,500 in April 2017 (from £11,000 in April 2016).
The higher rate (40%) tax band will rise to £45,000 in 2017 (from £43,000 in April 2016).

Duty

Fuel duty will be frozen for the 6th year.
Duty in beer, cider, whisky and other spirits is frozen.
Duties on wine and other alcohol will rise in line with inflation.
Tobacco duties will increase by 2% above inflation.
Insurance Premium Tax will rise to 10% (from 9.5%) which will cover home, motor, health care and pet insurance but not life insurance. This will be invested in flood defences.
A new levy will be introduced on sugary drinks in 2 years, which will be spent on supporting sport in primary schools.

New Lifetime ISA

People aged under 40 in April 2017 will be able to take out a new lifetime ISA. For every £4 invested the Government will invest £1. This can be taken out tax free to buy a first home, if they are terminally ill or from the age of 60. There are penalties if funds are withdrawn at other times.
The annual ISA limit for regular ISAs will increase to £20,000 .

For businesses

Business rate relief of 100% will rise to £12,000 (from £6,000) and the higher rate will rise to £51,000 (from £18,000) which will benefit over 250,000 companies.
Corporation tax will reduce to 17% in 2020.
The higher rate of Capital Gains Tax will reduce to 20% (from 28%) with the basic rate cut to 10% (from 18%).
Class 2 National Insurance Contributions for self employed people will be abolished from 2018 with 3 million people expected to benefit by £130.
Stamp duty on commercial property is changing with buyers of commercial property paying less in stamp duty. Stamp duty rates for leasehold rent transactions is also changing.

If you need any advice on how the Budget affects you contact Andrew Gane for personal finance advice and Margaret Turner for how this affects your business and accounts.

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