George Osborne has delivered his 8th Budget as Chancellor, outlining the Government’s plans for the economy and the state of the public finances.
He said that the UK economy “is strong but that the storm clouds are gathering again.” He also said that the Government was presenting “a Budget that would focus on the long term, put the next generation first and make the UK fit for the future.” Growth and inflation forecasts for the year were both cut to 2% and 0.7% respectively. However the UK is forecast to grow faster than any other major Western economy.
Below we list some of the key highlights of today’s Budget however for a more detailed summary have a look at the Budget News section of the TFMC App. If you haven’t downloaded it yet just search TFMC in your App Store.
Key Highlights of the Budget:
- Personal Tax-Free Allowance to increase to £11,500 from April 2017 with the aim to reach £12,500 by the end of this parliament.
- The Higher Rate Tax Threshold will increase to £45,000 from April 2017 – a move the Chancellor said will affect around half a million people
- Corporation Tax to fall to 17% by 2020
- Small Business Rates Relief threshold to rise from £6,000 to £15,000 in April 2017, which should see around 600,000 small businesses not paying business rates from 2017. The higher rate will increase from £18,000 to £51,000
- Class 2 National Insurance will be abolished in 2018, a move the Government says will give 3 million self-employed workers a tax cut of more than £130
- Capital Gains Tax to be cut from 28% to 20% for top rate tax payers and from 18% to 10% for basic rate payers
- Digital tax-free allowance to be introduced in 2017. Two £1,000 tax free allowances one for selling goods or services online and the other for property income
- ISA limit to be increased from £15,000 to £20’000 in 2017
- A new Lifetime ISA to be introduced for under 40’s which will see the Government give savers £1 for every £4 they save up to the annual limit of £4,000 until they turn 50
- Insurance Premium Tax to rise by 0.5%, which will go towards the additional £700m the Government has said it will spend on flood defences
- Commercial Stamp Duty to be reformed in the same way that residential property has been, with a nil rate band on purchases up to £150,000, 2% on the next £100,000 and a top rate of 5%
- Fuel duty frozen for the 6th year in a row
- Introduction of a new “sugar” tax on soft drinks in 2018, which will fund school sports
- All schools will be in the process of becoming an academy by 2022