As part of George Osborne’s Budget announcement this week, there has been a number of points being reported and commented on. We’ve highlighted some of the key areas that will affect our clients below:
• As expected, personal allowance is set to rise to £11,500 from 2017 and higher rate of tax threshold to increase to £45,000 from 2017.
• The ISA limit is also set to increase from 2017 to £20,000. This latest increase will mean the ISA limit has nearly doubled since 2010, which is great news for those that are able to save, in particular for couples who have an ISA account each.
• Lifetime ISA to be introduced, which will be particularly useful for first time buyers, but does overlap with pensions due to the age restriction on withdrawing funds. The introduction of the Lifetime ISA gives savers another option to consider. See our other blog post here for more information.
• We were surprised to see that Corporation Tax is to be cut to 17% by April 2020, but this will definitely work in the favour of small businesses, as well as the small business rate relief thresholds that are to be more than doubled.
• Commercial stamp duty to have a 0% rate up to £150,000 (other additional bands apply and come into effect from midnight on 16th March) – these points show that more is trying to be done for small businesses in the UK.
• Flat rate Class 2 National Insurance contributions to be removed for self-employed individuals from 2018, which is a welcome simplification to the system.
• Capital Gains Tax to be cut to 20% for higher rate taxpayers and 10% for basic rate taxpayers in certain circumstances, which is a significant benefit to investors, but won’t apply to those selling a second property as the Government continue to discourage Buy To Let landlords.
• Public pension scheme discount rate reduced to 2.8%, meaning that public sector employers will have to pay higher contributions to staff’s pensions from 2019/20 onwards.
If you have any questions regarding the Budget and you’re looking for financial advice, get in touch with our team here.