Budget Summary 2015
19 March 2015
Chancellor George Osborne used his final Budget statement of this Parliament to announce that “Britain is walking tall again”.
There are many things to be positive about:
The economy grew 2.6% in 2014 – faster than any other advanced economy. The Office for Budget Responsibility (OBR) has revised up its 2015 growth forecast to 2.5% (up from 2.4% at the Autumn Statement in December 2014 and 2.3% a year ago).
Unemployment fell by 102,000 in the 3 months to January 2015 and the employment rate is 73.3% – the highest level since comparable records began in 1971. The OBR predicts that unemployment will fall from 5.7% at the end of 2014 to 5.3% this year.
Falling world food and oil prices mean that that the OBR has revised down its inflation forecast to 0.2% for 2015. Osborne confirmed that the consumer price index inflation target remains at 2%.
The Chancellor plans to use funds from bank sales, lower interest charges on government gilts and a smaller welfare bill to pay down the national debt.
Against this backdrop, the Chancellor promised a Budget that “does more to back businesses and make work pay”. However, with a general election less than 2 months away, it is not certain how many of the new measures will make it into law before the dissolution of Parliament.
The following report summarises the announcements made by Chancellor George Osborne during the 2015 Budget on Wednesday 18 March 2015. Alternatively you can download our budget booklet by clicking the image:
Budget 2015: At a glance
The measures announced in Budget 2015 include:
The main rate for corporation tax will be cut to 20% from April 2015.
Businesses will no longer have to pay NICs for employees under-21 from April 2015. They will also be abolished for apprentices under 25 from April 2016.
Small business relief will be extended until April 2016. Inflation-linked increases to business rates will be capped at 2% until April 2016.
Diverted profits tax
A new tax aimed at large companies that artificially shift profits offshore will come into effect from 1 April 2015.
Entrepreneurs’ relief will only be available to those selling genuine stakes in businesses.
The annual bank levy will be raised to 0.21%.
Travel and subsistence
Travel and subsistence relief will be restricted for individuals working through intermediaries such as umbrella companies from April 2016.
Farmers will now be able to average their income over 5 years for tax purposes from April 2016.
The minimum wage will rise to £6.70 in the autumn, with the apprentice rate increasing to £3.30.
The lifetime allowance will be lowered from £1.25 million to £1 million from 6 April 2016 and will be indexed to increase in line with inflation from April 2018.
Annuity holders will be able to sell their retirement income at their marginal rate of tax from April 2016.
The personal income tax allowance will be £10,600 in 2015/16.The threshold for the higher rate will increase to £43,300 in 2017/18.
More flexible ISAs will allow people to take money out of their account and return it in the same year without losing any of their annual tax-free entitlement.
Help to Buy ISA
The Help to Buy ISA is designed to help first time buyers save for a deposit on their first property.
Personal savings allowance
The first £1,000 of interest on savings earned will be tax-free for basic rate taxpayers from April 2016.
The government will review deeds of variation for tax purposes.
Beer duty will be cut by 1 pence, while cider and spirit duties will be reduced by 2%.
The fuel duty increase that had previously been scheduled to come into effect in September 2015 has been cancelled.
Support to British businesses exporting to China will be almost doubled through an increase in UK Trade & Investment resources.
Charities can claim automatic gift aid on their first £8,000 of donations.
There will be investment in transport across the country, including a new transport strategy for the north and £7 billion to the South West.
The Severn Crossing
From 2018 the toll rates for the Severn Bridge will be reduced and the higher band for vans and small buses removed completely.
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