A Round Up Of The Main Changes Announced In The Budget 2016

17Here is a quick round up of the main tax measures coming out of the Budget 2016:

  • By April 2020 Corporation Tax will fall to 17%
  • Loans to participators will be taxed at 32.5% to prevent tax avoidance.
  • From April next year the interest deductibility for the largest companies will be restricted to 30% of UK earnings
  • Introduction of two new tax-free allowances each worth £1,000 a year, for both trading and property income for micro businesses
  • The new threshold for small business rate relief will raise from £6,000 to a maximum threshold of £15,000. The new threshold for the higher rate will raise from £18,000 to £51,000.
  • From midnight commercial stamp duty will have a zero rate band on purchases up to £150,000; a 2% rate on the next £100,000; and a 5% top rate above £250,000. There will also be a new 2% rate for those high value leases with a net present value above £5 million.
  • The Supplementary Charge on oil and gas will be cut from 20% to 10%.
  • The standard rate of Insurance Premium Tax will be increased by 0.5%
  • By 2020 every primary and secondary school in England will be an academy, or be in the process of becoming an academy.
  • A new sugar levy will be introduced on the soft drinks industry in 2 years time. The money from this new levy will be used to double the amount of funding that is dedicated to sport in every primary school and for secondary schools the government will fund longer school days for those that want to offer their pupils a wider range of activities, including extra sport.
  • Fuel duty frozen for the 6th year.
  • Tobacco will rise by 2% from midnight and hand rolling tobacco will rise by 3%.
  • Duty on beer, cider, whiskey & spirits frozen. All other alcohol subject to a rise.
  • Class 2 National Insurance Contributions will be abolished from 2018.
  • Capital Gains Tax will be cut from 28% to 20% and the Capital Gains Tax paid by basic rate taxpayers cut from 18% to 10%. The rates will come into effect in three weeks’ time. The old rates will be kept in place for gains on residential property and carried interest.
  • New 10% Capital Gains Tax rate on long term external investment in unlisted companies, up to a separate maximum of £10 million of lifetime gains.
  • From April next year the ISA limit will be increased from just over £15,000 to £20,000 a year for everyone.
  • New Lifetime ISA introduced so from April 2017, anyone under the age of 40 will be able to open a Lifetime ISA and save up to £4,000 each year and the government will give you £1,000 each year until age 50.
  • Personal allowance will be £11,000 from April 2016 & will rise to £11,500 from April 2017.
  • The higher rate of tax will be moved from £42,385 to £45,000 from April 2017.

If you have any questions or would like any more information on how these changes affect you please call us on 01782 479699.

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