Summer Budget 2015 – as it happened

Budget infographic

The theme

• A “Budget for working people”

• “A big Budget for a country with big ambitions”

Economic background

• The UK is “growing faster than any major advanced economy”

• The government’s “long term economic plan is working”

• Growth of 3% last year

• The budget deficit is now less than half the 10% inherited by the Coalition government

• Business investment is up 31.9% since 2010

• The richest are now paying a greater share of tax than at the beginning of the last Parliament

• The gender pay gap is at an all-time low

Fiscal policy

• The deficit is to be cut at the same rate as in the last parliament

• A Budget surplus by 2019/20

• The national debt to fall each year, reaching 68.5% of GDP in 2020/21

Tax changes affecting individuals

• Personal allowance of £11,000 from April 2016

• Higher rate threshold of £43,000 from April 2016

• Tax on dividends paid to individuals increased, but with an exempt band

• ‘Non-dom’ tax status abolished for individuals in the UK for 15 of the last 20 years

• Higher rate interest relief for buy-to-let landlords to be gradually withdrawn

• A Green Paper to be published on the taxation of pensions

• Action against inheritance tax avoidance by individuals holding UK residences through companies

• New vehicle excise duty rates

Tax changes affecting businesses

• Corporation tax down to 19% in 2017 and 18% in 2020

• Annual investment allowance for plant and machinery set at £200,000 permanently

• NIC employment allowance increased to £3,000

• Insurance premium tax increased to 9.5% from November 2015

• Bank levy to be phased out. 8% corporation tax surcharge on bank profits from 1 Jan 2016

• Action to stop abuse of losses in controlled foreign companies (CFCs)

• Apprenticeship levy on all large firms

Tax changes affecting individuals and businesses

• Fuel duty will remain frozen this year

Tax avoidance

• £750m will be available to HMRC to tackle fraud, avoidance via offshore trusts and the hidden economy; £7.2bn expected to be raised

• Serial users of tax schemes to be named and shamed

Welfare changes

• Working age benefits frozen for four years

• Tax credit thresholds reduced

• £26,000 benefits cap reduced to £23,000 in London and £20,000 elsewhere

• No further tax credits or universal credit for families with more than 2 children

Other expenditure announcements

• Public sector pay awards – 1% a year for next four years

• Additional £8bn funding a year for the NHS

• Student maintenance grants replaced by loans from 2016/17

• Student loans increased.

• 18-21 year olds ‘earn or learn’ obligation

Other

• ‘MOT’ tests deferred until cars are four years old

• National living wage of £7.20 per hour from April 2016 rising to £9 an hour by 2020

Comments from Moore Stephens

• “Non-doms likely to leave the UK despite the Chancellor acknowledging their contribution”

• “Not sure where the Chancellor gets his figure of £1.5bn generated from non-doms. If they leave 45% of nothing is nothing”

• “Disappointing that the Chancellor has done nothing to address the anomalous 60% effective income tax rate paid by those earning £100,000-£121,200”

• “First conservative Budget for 18 years pulls a 'herd of rabbits' from the hat”
 

Contacts

Business Tax team
Private Client Tax team