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Summer Budget 8 July 2015

July 8, 2015 By Jet Accountancy

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Budget 2015 key points: At-a-glance summary

  • New national living wage will be introduced for all workers aged over 25, starting at £7.20 an hour from April 2016 and set to reach £9 by 2020 – giving an estimated 2.5 million people an average £5,000 rise over five years
  • Inheritance tax threshold to increase to £1m, phased in from 2017, underpinned by a new £325,000 family home allowance
  • Personal allowance, at which people start paying tax, to rise to £11,000 next year. The government says the personal allowance will rise to £12,500 by 2020, so that people working 30 hours a week on the minimum wage do not pay income tax
  • The point at which people start paying income tax at the 40p rate to rise from £42,385 to £43,000 next year
  • Tax credits and Universal Credit to be restricted to two children, affecting those born after April 2017
  • Income threshold for tax credits to be reduced from £6,420 to £3,850
  • Working-age benefits to be frozen for four years – including tax credits and local housing allowance, but maternity pay and disability benefits exempted
  • The amount people can contribute to their pension tax-free to be reduced for individuals with incomes over £150,000
  • Corporation tax to be cut to 19% in 2017 and 18% in 2020
  • Permanent non-dom status to be abolished – from April 2017, anyone who has lived in the UK for 15 of the past 20 years will pay same level of tax as other UK citizens, raising an estimated £1.5bn
  • £7.2bn to be raised from clampdown on tax avoidance and tax evasion with HMRC budget increased by £750m
  • Bank levy rate to be gradually reduced over the next six years and a new 8% surcharge on bank profits introduced from 2016
  • Cap on charges imposed by claims management companies and an increase in insurance premium tax to 9.5% from November
  • New apprenticeship levy for large employers
  • Climate Change Levy exemption for renewable electricity to be removed
  • National Insurance employment allowance for small firms to be increased by 50% to £3,000 from 2016
  • Dividend tax credit to be replaced with a new tax-free allowance of £5,000 on dividend income. Rates of dividend tax to be set at 7.5%, 32.5% and 38.1%.
  • Annual investment allowance will be fixed permanently at £200,000 from January 2016

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