On Wednesday 8 July 2015, the Chancellor of Exchequer, George Osborne gave his Summer Budget to Parliament. The key announcements of this budget are:
- From 2016, a new National Living Wage of £7.20 per hour will be introduced from April 2016 for over 25s. This Living Wage will further rise to over £9 per hour by 2020.
- A surplus will be run by the government in 2019-20 and debt will fall in every year.
- The tax-free Personal Allowance will be increased from £10,600 in 2015-16 to £11,000 in 2016-17. And, the Government hopes to increase this allowance to £12,500 by 2020.
- The Ministry of Defence’s budget will rise by 0.5% each year to 2020-21.
- The welfare system will be reformed where working age benefits will be frozen for 4 years from 2016-17, household benefit cap will be reduced to £20,000 and rents for social housing will be reduced by 1% a year for 4 years.
- From April 2016, the dividend tax credit will be replaced by a new £5,000 tax-free dividend allowance for all taxpayers.
- A family home allowance will be given to each individual from April 2017. This allowance can be passed on to their children or grand children after their demise.
- From April 2016, the contribution of tax-free into a pension for people with an income of more than £150,000 will be reduced.
- The higher rate threshold will increase from £42,385 in 2015-16 to £43,000 in 2016-17.
- The Corporation Tax rate will be further cut from the current 20% to 19% in 2017 and 18% in 2020.
- From January 2016, the annual investment allowance will be set permanently at £200,000.
- The Employment Allowance will rise from £2,000 to £3,000.
- From November 2015, the standard rate of Insurance Premium Tax will increase to 9.5% from 6%.
- The claims on the by the management companies for payment protection insurance or personal injury insurance will be limited.
- The tax relief for the individual landlords will be restricted to 20% by April 2020.
- From April 2017, permanent nom-dom status will be eliminated.
- Following increasing bank profits, the government will be introducing a new 8% tax on banking sector profits starting from January 2016, a reduction in the rate of the Bank Levy, and excluding UK banks’ overseas subsidiaries from the Bank Levy.
- 3 million new apprenticeships will be created by 2020.
- Transport for the North (TfN) will be funded by £30 million for over 3 years.
- From September 2017, working families with 3 and 4 year olds will be given 30 hours of free childcare.
- From the 2016-17 academic year, cash support for new students will increase by £766 to £8,200 a year.
- From 2016-17, public sector pay will be increased by 1% per year for 4 years.
- The government will continue to clamp down on tax avoidance to ensure each individual and businesses pay the tax that’s due.