Summer Budget July 2015
The Chancellor has delivered his Summer Budget 2015 and here are the key points announced:
Further increases of the personal allowance to £11,000 and the higher rate threshold to £43,000 from 6th April 2016. In 2017/18 the thresholds will be £11,200 and £43,600.
From April 2016 the current Dividend Tax Credit will be replaced by a Dividend Allowance of £5,000. The dividend tax rates will be 7.5%, 32.5% and 38.1% for basic, higher and additional rate taxpayers respectively.
A new transferable nil-rate inheritance tax band of £175,000 per estate is being introduced where the main residence is passed to direct descendants. The bands will be £100,000 in 2017/18, £125,000 in 2018/19, £150,000 in 2019/20 and £175,000 in 2020/21. There will be a tapered withdrawal of the additional nil-rate band for estates in excess of £2 million.
From April 2016 the annual allowance for pensions tax relief will be tapered down to a minimum of £10,000, for those with total income (including pension contributions) of over £150,000 or income (excluding pension contributions) of over £110,000.
Mortgage interest tax relief will be restricted to basic rate for landlords, being phased in over 4 years from April 2017. From April 2016 the 10% Wear and Tear Allowance will be replaced by tax relief for expenditure incurred.
The Rent-a-room relief will be increased to £7,500 from April 2016.
Corporation tax will be reduced to 19% in 2017 and to 18% in 2020.
From 8th July 2015 there will be a restriction on the corporation tax relief for the purchase of goodwill.
The Annual Investment Allowance will be set at a permanent level of £200,000 from January 2016 for tax relief on purchases of plant and machinery.
The Employment Allowance will be raised to £3,000 from April 2016. Directors who are the sole employee will no longer be able to claim from April 2016.
A new National Living Wage of £7.20 for workers over 25 will be introduced from April 2016.
HMRC may recover debts of more than £1,000 directly from bank accounts.
For new cars registered from April 2017 the Vehicle Excise Duty (VED) will range from £10 to £2,000, in the first year of registration and £140 thereafter. Cars with a list price of more than £40,000 will pay a £310 supplement for 5 years. Cars with zero CO2 emissions will pay no VED.
The standard rate of insurance premium tax is to be increased from 6% to 9.5% in November this year.
The Budget document also stated: “The government will reform the regulation of the claims management sector to help to drive out further unnecessary costs from insurance premiums.
“This Budget announces a fundamental review of the regulation of CMCs, led by the chairman of the Chartered Trading Standard Institute board Carol Brady, which will report to HM Treasury and the Ministry of Justice in early 2016.
“In addition, there is also a case for reform of the fees that CMCs charge consumers, particularly in those instances where consumer complaints fall within the remit of the Financial Ombudsman Service. Therefore, the government will bring forward proposals for the introduction of a cap on the charges that CMCs can apply to their customers, and will consult on how this will work in practice.
“This builds on the success of previous measures including the ban on referral fees and action to address fraudulent whiplash claims. The Insurance Fraud Taskforce will report by the end of 2015 on what can be done to reduce the impact of fraud on insurance premiums.”
