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Budget Review 2015 - At A Glance

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The Chancellor, George Osbourne, has today delivered the emergency summer Budget, the first for a majority Conservative government in nearly 20 years.

A summary of the relevant points from the Budget is detailed below:

Personal Taxation and Pay
  • Introduction of a new national living wage for all workers aged over 25, starting at £7.20 an hour from April 2016 and set to reach £9 by 2020.
  • Inheritance tax threshold will be increased to £1 million from 2017.
  • Personal allowance, at which people start paying tax, to rise to £11,000 next year.
  • The point at which people start paying income tax at 40p to rise from £42,385 to £43,000 next year.
  • Mortgage interest relief for buy-to-let homebuyers to be restricted to basic rate of income tax from 2017. 
Welfare and Pensions
  • Green Paper published on proposals for "a radical change" to pension saving system.
  • Tax credits and universal credit to be restricted to two children, affecting those born after April 2017.
  • Income threshold for tax credits to be reduced from £6,420 to £3,850.
  • Working-age benefits to be frozen for 4 years - including tax credits and local housing allowance, but maternity pay and disability benefits exempted.
  • Rents in social housing sector will be reduced by 1% a year for the next 4 years.
  • Higher-income households in social housing will be required to pay rents at the market rate.
  • Disability benefits will not be taxed or means-tested, while state pension triple lock to be protected.
  • 18-21-year-olds will not be entitled to claim housing benefit automatically, with a new "earn to learn" obligation.
  • Employment and support allowance payments for claimants deemed able to work to be "aligned" with jobseeker's allowance for new claimants.
  • Annual tax relief on pension contributions to be limited to £10,000 a year.
Business
  • Corporation tax to be cut to 19% in 2017 and 18% in 2020.
  • Permanent non-dom status to be abolished - from April 2017, anyone who has lived in the UK for 15 of the past 20 years will pay same level of tax as other UK citizens.
  • £7.2 billion to be raised from clampdown on tax avoidance and tax evasion with HMRC budget increased by £750 million.
  • Bank levy rate to be gradually reduced over the next 6 years and a new 8% surcharge on bank profits introduced from January 2016.
  • Cap on charges imposed by claims management companies and an increase in insurance premium tax to 9.5% from November.
  • National Insurance employment allowance for small firms to be increased by 50% to £3,000 from 2016.
  • Dividend tax credit to be replaced with a new tax-free allowance of £5,000 on dividend income. Rates of dividend tax to be set at 7.5%, 32.5% and 38.1%. 
Housing
  • Rent-a-room relief scheme to rise to £7,500
Measures announced before Budget
  • The annual household benefit cap will be reduced to £23,000 in London and £20,000 in the rest of Britain.
  • Subsidies for social housing will be phased out with local authority and housing association tenants in England, who earn more than £30,000 - or £40,000 in London, having to pay up to the market rent.
  • A consultation will take place on changing Sunday trading laws.
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