The Budget 2015 – as it happened

 The economy

• “The sun is starting to shine and we are fixing the roof”

• “No unfunded spending, no irresponsible borrowing”

• 2.6% growth in UK economy last year – faster than any other developed country

• The OBR has revised its growth forecasts upward:

- 2.5% in 2015
- 2.3% in 2016
- 2.3% in 2017
- 2.3% in 2018
- 2.4% in 2019

• GDP per capita up 5% in this parliament

• Households £900 better off in 2015 than 2010

• Lowest inflation on record

• Percentage of national debt to GDP is falling and will continue to decrease over the next five years, down to 71%

• Deficit to be eliminated in 2019/20

Employment

• “More people have jobs in Britain than ever before”

• 1.9 million new jobs in this parliament

• Unemployment to fall to 5.3% this year

Personal tax

• Personal allowance was £6,500 in 2010. Will be £10,600 in 2015/16, £10,800 in 2016/17, £11,000 in 2017/18

• Higher rate threshold will rise from £42,385 in 2015/16 to £43,300 by 2017/18

• A more flexible ISA – freedom to take money out and put it back later in the year

• A new ‘Help to buy’ ISA with a 25% top-up

• Personal savings allowance (nil-rate band) of £1,000 from 2016

• Annual tax return being ‘abolished’ from next year

• Pensions lifetime allowance to reduce to £1m but annual pension allowance will be protected

• Review of use of deeds of variation to reduce inheritance tax

• Share of income tax paid by top 1% rose from 25% in 2010 to 27% this year

Business tax

• Class 2 NICs to be abolished for self-employed

• No surprise cut in corporation tax but a slight boost to business – the Annual Investment Allowance will reduce at 1 January 2016 as proposed, but not back down to £25,000

• Farmers to average profits for tax over 5 years (up from 1 year)

• Confirmation that diverted profits tax will come into effect on 1 April 2015

• Improvements to tax reliefs for video, television and films

• New tax relief for orchestras, as previously announced

• Bank levy up to 0.21%

• Banks will not be able to deduct miss-selling compensation in calculating profits for tax

• North sea supplementary charge reduced from 30% to 20% from 1 Jan 2015

• Petroleum revenue tax to be reduced from 50% to 30% in 2016

• New tax allowance to encourage North Sea investment

• Major review of business rates

Tax avoidance and tax evasion

• £5 billion to be gained from countering tax avoidance and evasion by 2017/18

• New criminal offences for tax evasion

Excise duties

• As widely expected, the fuel duty increase planned for September will not be implemented

• A ‘penny off a pint’ and a 2% cut in spirits duty

Other

• £30bn expenditure savings by 2017/18

• Gift aid small donations relief limit increased from £5,000 to £8,000

• Sale of mortgages from Northern Rock and Bradford and Bingley and Lloyds shares raising £22bn

• Ultra-fast broadband of at least 100mb to all homes

Contacts

Business Tax team
Private Client Tax team