Key Changes & Updates for Individuals
The biggest surprise after announcing in the last budget that there would be cuts to tax credits was the decision to keep the current regime, it had after all faced fierce resistance from both houses. The Chancellor did however make some changes to the benefits & tax system for individuals.
A single tier pension for new pensioners from April 2016 has been set at £155.65 per week but not everyone will be entitled to the full single tier rate.
The basic state pension is set to rise by £3.35 to £119.30 per week next year.
With those in retirement benefitting from their state pension increasing by the higher of 2.5%, CPI inflation or the average wage growth, the government has pledged to retain this throughout this term.
Landlords and Second Homes
Landlords should be warned that from 2019 any Capital Gains Tax will become payable from 30 days of the sale, putting cash into the Governments pockets up to 21 months earlier than previously payable.
Stamp duty has been set 3% higher on additional properties whether it is a buy to let or a second home to come into effect from 1 April 2016. This is expected to raise £1 billion by 2021.
Administration of a Deceased Estate
The government is to set out further plans for legislation to come into effect in 2016 to allow the ISA savings of a deceased person to continue to benefit from tax advantages throughout the administration of their estate.
Temporary absence in Housing Benefit and Pension Credit
The government will end the payment of Housing Benefit and Pension Credit to claimants to who travel outside of Great Britain for longer than 4 weeks consecutively, from April 2016.
Free child care
30 hours of free childcare for three and four-year-olds will be available from 2017, but only to parents working more than 16 hours and who each earn £100,000 or less which is lower than the initially proposed £150,000 limit.
Key Changes & Updates for Business
A small amount of welcome news for smaller businesses, although for the larger corporate entities and new tax in the form of the “Apprenticeship Levy”.
The government will introduce the apprenticeship levy in April 2017. It will be set at a rate of 0.5% of an employer’s pay bill and will be paid through PAYE. Each employer will receive an allowance of £15,000 to offset against their levy payment. This means that the levy will only be paid on any pay bill in excess of £3 million.
Company Car Tax Diesel Supplement
From April 2016 the 3 percentage point differential between diesel cars and petrol cars will be retained until April 2021.
Small Business Rate Relief (SBRR)
The government will extend the doubling of SBRR for a further year from 1 April 2016.
Averaging for Farmers
The average period for self-employed farmers will be extended from 2 years to 5 years as of April 2016, with farmers having the option of either averaging period.