Budget 2016

Posted on Friday 1st April, 2016 by

Taxation

  • From 6 April 2016, the higher rate of Capital Gains Tax (CGT) will be reduced from 28% to 20%, and the basic rate will be reduced from 18% to 10%.
  • The VAT registration threshold will increase in line with inflation to £83,000 from 1 April 2016.
  • Class 4 National Insurance contributions (NICs) will be reformed so that the self-employed continue to build entitlement to the State Pension and other contributory benefits, following the abolition of Class 2 NICs from April 2018.
  • A new £1,000 allowance for property income and £1,000 allowance for trading income will be introduced from April 2017. Individuals with property or trading income below £1,000 will no longer need to declare or pay tax on that income.
  • From April 2017, where the public sector engages an off-payroll worker through their own limited company, liability to pay the correct employment taxes will move from the worker’s own company to the public sector body or agency / third party paying the company.
  • The Office of Tax Simplification (OTS) will review the impacts of moving employee NICs to an annual, cumulative and aggregated basis and moving employer NICs to a payroll basis.
  • The main rate of corporation tax will be reduced to 17% in 2020.

The self-employed

  • From 2018 businesses, the self-employed and landlords who are keeping their records digitally and providing regular digital updates to HMRC will be able to opt for pay-as-you-go tax payments.
  • Self-employed Working Tax Credit claimants will be able to access business support. The mentoring support offered on the New Enterprise Allowance scheme will be extended to self-employed Universal Credit claimants.
  • The DWP will trial face-to-face support from Jobcentre advisors for self-employed Working Tax Credit claimants.

Business rates

  • Small Business Rate Relief (SBBR) will be permanently doubled from 50% to 100% in England from 1 April 2017.
  • Business properties with a rateable value under £12,000 will qualify for 100% relief, while properties with a rateable value between £12,000 and £15,000 will qualify for tapered relief.
  • By 2022, local authority business rate systems will be linked to HMRC digital tax accounts so that business owners can manage their rates bills alongside other taxes in one place.

Business growth and support

  • Further steps have been announced for the allocation of the Local Growth Fund, including up to £1.8 billion allocated through a further round of Growth Deals with Local Enterprise Partnerships later in 2016.
  • The next round of the Coastal Communities Fund, for projects starting in 2017-18, will open for applications in summer 2016.

Employment law

  • A consultation will take place in May 2016 on how to extend Shared Parental Leave and Pay to working grandparents.
  • From October 2016 the main rate of National Minimum Wage for workers aged 21 to 24 will be set at £6.95.

The full Budget report and associated notices are available from HM Treasury at:
https://www.gov.uk/government/publications/budget-2016-documents

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