Budget 2016 – Winter is coming…
The Budget is normally the big political set piece of the Spring economic agenda, particularly when it’s the second Budget in a parliamentary term with four more years to go – it’s a chance for the Chancellor to open up his tool box, flex his fiscal muscles and maybe even make his own move in The Game of Thrones, knowing full well that there are four more Budgets to work towards the next Election.
But as George Osborne stepped up to deliver his 2016 Budget all indications were that it had already been overshadowed by the political debate over the EU referendum, the Brexit agenda and perhaps even by Maria Sharapova and the magical properties (allegedly) of Meldonium.
Couple this with the fact that the economic numbers have got worse since the Autumn Statement and the Chancellor inevitably painted a picture of an economy growing faster than its European competitors but one where UK PLC was not yet out of the darkness, where stability was the objective, and where the key measures were:
- Further commitment to supporting the infrastructure for the Northern Powerhouse including a road tunnel between Manchester and Sheffield.
- A business tax roadmap which will tackle tax avoidance and evasion, attract multi-nationals to UK PLC and see a reduction in the rate of corporation tax to 17% by 2020.
- An increase in the personal allowance to £11,500 from 6 April 2017 and the threshold at which you start to pay higher rate tax to £45,000.
- A reduction in capital gains tax rates to 20% for higher rate taxpayers and to 10% for those paying tax at the basic rate, but not in relation to gains on residential properties.
- Reform of the rates of SDLT payable on the purchase of commercial property – from Midnight no SDLT will be payable on the first £150,000 and 2% on the next £150,000.
- A sugar tax which will raise £520 million and contribute directly to fund School Sports days and the longer days initiative.
- Introduces a flexible lifetime ISA as a means of helping those aged under 40 at 5 April 2017 to save tax efficiently for either their retirement or to buy a house.
- Anti-avoidance measures targeted on disguised remuneration, personal service companies and interest deductions for multi-national groups.