Budget 2016
Key Points
Personal Taxation
The higher rate (40%) threshold will rise from £42,385 to £45,000 in April 2017.
The tax-free personal allowance will rise from £11,000 to £11,500 in April 2017.
Capital Gains tax rate to be cut from 28% to 20%, and from 18% to 10% for basic rate tax payers.
National Insurance Contributions Class 2 are to scrapped from April 2018. This is good news for the self-employed, who until this year would have paid these by direct debit either monthly or quarterly.
Insurance premium tax to rise by 0.5% to 10%.
Tobacco, alcohol and fuel duty
Excise duties on tobacco to rise by 2% above inflation.
Duties on beer, cider and spirits have been frozen.
Wines and other alcohol will have inflationary rises in excise.
No change to fuel duty, for the 6th year in a row.
Savings and pensions
Big increase in the annual ISA limit from £15,240 to £20,000.
New lifetime ISA for the under 40’s. The government will put in £1 for every £4 saved up to a limit of £4,000. The ISA has to be used for home deposit or retirement.
There’s also new state-backed schemes for low paid workers, worth up to £1,200 over 4 years.
Business
Corporation tax rate which is currently 20%, will drop to 17% by 2020.
The annual threshold for 100% small business rate relief is to increase from £6,000 to £12,000.
New £1,000 tax free allowance for small enterprises engaged in online trading and online property income. Good news for part time ebayers.
Further crackdown on personal service companies used by individuals working in the public sector.
Stamp duty on commercial properties 0% up to £150,000. 2% on next £100,000 and 5% on purchases over £250,000.
New sugar tax to be introduced on soft drinks industry.