The Spring 2016 Budget – 16 March 2016

When discussing the UK economy, the Chancellor George Osborne stated the following:

• The UK has a faster growing economy than any other major economy in the world
• The UK is on course for a budget surplus from 2019
• The outlook for the global economy is weak
• Inflation is forecast at 0.7% for 2016 and 1.6% for 2017
• The growth forecast for 2016 is 2% and 2.2% for 2017 if the UK remains in the EU (which is to be voted on in a referendum in June 2016)

Following the spring 2016 budget, here is a summary of the key points:

• From 6 April 2016, capital gains tax for individuals will be reduced from 28% to 20% and from 18% to 10%
• From April 2017, the ISA allowance will rise from £15,000 to £20,000
• A lifetime ISA will be available from April 2017 for everyone under 40. For every £4 saved, the government will contribute £1. This will be available until the age of 50. This effectively gives you a savings rate of 25% when other savings accounts offer on average 2%.
• The personal allowance will rise to £11,500 from April 2017
• The higher rate threshold will increase to £45,000 from April 2017
• From 2018, class 2 national insurance contributions for the self-employed will be abolished
• Fuel duty will remain frozen for the 6th year in a row
• £12bn is to be raised from tackling tax avoidance schemes
• Corporation tax will be charged at 17% by April 2020
• A stamp duty reform for commercial property purchases from midnight tonight. 0% up to £150,000 2% for the following £100,000 5% thereafter
• Tax on oil and gas producers halved to 10%
• The cost of crossing the Severn bridge will halve by 2018
• 0.5% increase of tax on insurance premiums. The forecasted £700m raised will be spent strengthening flood defences
• In 2020, it is forecast that the majority of primary and secondary schools will be academies
• In 2 years’ time, a sugar tax will be levied on soft drinks producers to reduce obesity in children. The tax will be dependent upon the level of sugar found in the drink per 100ml. The tax raised will be used for funding additional sports in schools
• Beer and cider duty will also remain frozen along with whiskey
• Other alcoholic beverages will rise with inflation
• From midnight tonight, tobacco will rise at 2% over inflation and 3% for rolled tobacco

If any of the points mentioned above affect you, please contact our Private Client team to discuss further.

This content is correct at time of publication