The Budget is hot off the press and, as usual, it will take a few days for the many of the changes to surface from the raft of legislation that appears on Budget Day.
Here are some of the headlines though:
A new Lifetime ISA
From April 2017 you can save £4,000 per year and get a 25% bonus from the Government. You can use the money to buy your first house or help towards your retirement. The new ISA will only be available to the Under 40’s though – so that’s me out!
Personal Allowance Increases
From April 2017 the personal allowance increases to £11,500 and the higher rate band to £45,000.
Business Rates Support
From April 2017 a business will get 100% relief if the rateable value of the property is less than £12,000. Currently the amount is £6,000.
Capital Gains Cut – but not for residential landlords
From April 2016 the higher rate will be cut from 28% to 20% and the basic rate from 18% to 10%.
A surcharge will apply though to residential property to put it back as it is now. This does open the door for a future budget to increase CGT on just residential property. Don’t forget you don’t usually have to pay capital gains tax on the sale of your house.
From 2020 the rate will be 17% continuing the reduction for small businesses from 20% over the next few years.
Class 2 National Insurance
Will be scrapped from April 2018. A small saving of £2.80 per week for the self employed and the end of another administrative burden.
IR35 Changes for the public sector
From April 2017 individuals working through their own limited company in the public sector will no longer have to decide if IR35 applies to them. Instead, the public sector body will need to decide. More information is here.
Company car tax
The appropriate percentage applied to the list price will increase by 3% in 2019/20 subject to a maximum of 37%.
Increase to tax on overdrawn loan account
This will increase to 32.5% from 25% with effect from April 2016 for new loans after that date.
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