The Chancellor George Osborne delivered the first fully Conservative budget since 1996 on 8 July 2015.
Below is a summary of the main business-related announcements.
- Corporation tax: there will be tax rate cut to 19% in 2017 and a further reduction to 18% in 2020. The payment dates of companies with a profit in excess of £20 million will be brought forward so that payments are made closer to the point of profit.
- National insurance: the annual employment allowance will rise from £2,000 to £3,000 from April 2016, meaning that firms employing up to 4 workers full time on the national living wage will not pay any national insurance contributions.
- Living wage: from 2016, a new compulsory living wage of £7.20 for over-25s will be introduced, and will rise to more than £9 by 2020.
- Apprenticeships: an “apprenticeship levy” will be introduced on large companies which will provide these companies with funding for training.
- Bank levy: this bank tax will be reduced over the next 6 years. An 8% surcharge on banking sector profits will come into effect from 1 January 2016.
- Annual investment allowance: a new rate of £200,000 for all qualifying investment in plant and machinery made on or after 1 January 2016.
- Dividends: the dividend tax credit will be removed and replaced with a tax-free dividend allowance of £5,000 a year. The dividend tax rates will be set at 7.5% for basic rate taxpayers, 32.5% for higher rate taxpayers and 38.1% for the additional rate.
Contact us to talk about the new budget and how it will affect your businesses ongoing financial and tax planning.