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Reading Time | < 1 min 16 Mar 2016

Budget 2016 – other announcements

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Chancellor George Osborne delivered his Budget statement to the House of Commons on Wednesday 16 March 2016.

Here’s our summary of some of the highlights from his speech:

  • Capital gains tax will reduce from 28% to 20% from April 2016. The rate for basic rate taxpayers will fall from 18% to 10%.
  • Insurance premium tax will increase by half a percentage point.
  • There will be investment in rail and road projects across the country.
  • Stamp duty rates on additional properties which come into effect next month will also apply to large investors.

You can read about the measures in more details in our full Budget report, as well as our review of the measures relating to businesses and personal finance.

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Reading Time | < 1 min 16 Mar 2016

Budget 2016 – business announcements

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The Chancellor George Osborne delivered his Budget statement to the House of Commons on Wednesday 16 March 2016.

This is a summary of the main announcements affecting businesses:

Corporation tax 

The rate of corporation tax will be reduced to 17% by April 2020. 

Digital tax-free allowance

From April 2017, there will be 2 new £1,000 tax-free allowances. The first will for selling goods or providing services online and the other for property income. 

Business rates 

From next April, the threshold for small business rate relief will increase from £6,000 to £15,000. The higher rate threshold will rise from £18,000 to £51,000. 

Stamp duty 

There will be a nil-rate band of stamp duty on purchases of commercial properties up to £150,000. There will be a 2% rate on the next £100,000 and a 5% top rate on purchases above £250,000. 

Self employed 

In 2018, class 2 national insurance contributions will be abolished for the self-employed.

You can read about these measures in more detail in our full Budget report, as well as our overview of the measures relating to personal finance and other announcements.

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Reading Time | < 1 min 16 Mar 2016

Budget 2016 – personal announcements

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The Chancellor George Osborne has delivered his Budget statement to the House of Commons on Wednesday 16 March 2016.

Here’s our summary of the main announcements affecting personal finance:

Personal allowance 

The tax-free personal allowance will increase to £11,500 from April 2017. The threshold at which people pay 40% tax will rise to £45,000.

Help to Save Scheme 

A new savings scheme for lower-paid workers will be introduced, worth up to £1,200 over 4 years.

Excise duties

  • Fuel duty will be frozen for the 6th year in a row.
  • Duty rates on beer and cider will be frozen this year.
  • Excise duties on tobacco are set rise by inflation.

Lifetime ISA allowance

A lifetime ISA will be introduced to save for long-term retirement or to buy your first home. Adults under 40 will be able to save £4,000 each year with savers receiving a 25% bonus from the government.

The total ISA limit saved each year will also increase from £15,240 to £20,000 from April 2017.

You can read about these measures in more detail in our full Budget report, as well as our overview of the measures relating to businesses and other announcements.

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Reading Time | 2 mins 16 Mar 2016

Budget 2016 – Winter is coming…

Reading Time • 2 minsThe Budget is normally the big political set piece of the Spring economic agenda, particularly when it’s the second Budget...
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Reading Time | 2 mins 15 Mar 2016

Budget 2016 – Expectations

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Chancellor George Osborne will deliver the 2016 Budget this afternoon.

Commenting ahead of the speech Rain Newton-Smith, director of economics at the Confederation of British Industry, said that the chancellor faces tough choices to continuing balancing public finances, while businesses will “want to see concrete action to reform the UK’s business rates system, support investment through the capital allowance system and equip our world-class innovators with the tools they need to compete globally.” 

Aside from expected further cuts to public spending, here are some measures that have got the commentators speculating:

Business taxes

The British Chambers of Commerce (BCC) has warned that rises to auto-enrolment contributions as well as the introduction of the national living wage, apprenticeship levy and dividend taxes have significantly increased the burdens on businesses .

Dr Adam Marshall of the BCC, said:

“At a time when many businesses already face sharply higher costs and taxes, the chancellor must avoid adding any new obligations on our firms.”

Fuel duty

George Osborne is expected to announce a rise in fuel duty by 2p a litre. A survey by RAC found that 68% of motorists would be negatively impacted by the duty rise. 

Simon Williams, RAC spokesman, said: 

“The chancellor has an excellent record of freezing duty but by not referring to it in the autumn statement, he implied that the 57.95p currently charged on every litre will be subject to inflationary increases.”

Business rates

The Chancellor is set to report back on the structural review of businesses rates announced in the Autumn Statement. Mike Cherry, policy director for the Federation of Small Businesses, stated that the current system “is not fit for purpose, is unresponsive to economic circumstances, and is viewed as deeply unfair by the business community.” 

Funding support

The government will introduce financial support for workers on work-in benefits including a new Help to Save scheme, national mentoring campaign and increases in the national minimum wage. 

We will publish summaries of the Chancellor’s announcements after he has presented the Budget statement to the House of Commons.

A detailed guide to the Budget 2016 will be available on our website on the morning of Thursday 17 March.

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Reading Time | < 1 min 15 Mar 2016

Businesses call for clarity on apprenticeship levy

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Businesses are calling for more clarity on the logistics and affordability of apprenticeship levy.

From April 2017 the apprenticeship levy will see employers with wage bills over £3 million pay a 0.5% levy to fund apprenticeships.

However businesses have questioned the implementation of the levy and how it contributes to the government’s stated goal of creating 3 million apprenticeships by 2020. 

Research by City & Guilds found that 90% of surveyed employers thought the levy target was subjective, while 84% want the levy to focus more on sectors facing skill shortages.

The Institute of Directors (IoD) also found that 9% of businesses believe that the levy will encourage more work opportunities, while more than 33% said the levy will force additional costs leading to lower wages, raising prices or finding alternative savings.

Seamus Nevin, head of employment and skills policy at IoD, said 

"The biggest concern is making sure that the quality of apprenticeships meets what we need – this can't just be a box-ticking exercise. 

“First of all, the 3 million target is around starters, not finishers, and we know that 40% of apprenticeships that were started under the government's last term of office weren't completed.”

Talk to us today to find out more about the apprenticeship levy.

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Reading Time | < 1 min 14 Mar 2016

Help to Save scheme announced

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A new Help to Save scheme will be introduced for workers on low incomes and in-work benefits such as universal credit or tax credits. 

A part of the scheme, people can save up to £50 a month alongside a 50% bonus after 2 years – worth up to £600.

Research shows that almost half of UK adults have less than £500 to cover for their emergencies.

Workers can continue to save under the scheme for a further 2 years with account holders receiving another £600.

Alongside the new scheme, the national minimum wage is also set to increase in October 2016 with half a million people receiving a pay rise of up to £450.

The new measures will be fleshed out further in Wednesday’s Budget.

Chancellor George Osborne said:

“This government is determined to improve the life chances of the poorest in our society and our new Help to Save scheme will mean millions of low income savers across the country could now receive a government bonus of up to £1,200 to help them build up their savings.”

Talk to us today to discuss about your personal finance planning.

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Reading Time | < 1 min 11 Mar 2016

Apprenticeship levy may disadvantage smaller businesses

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The Chartered Institute of Taxation (CIOT) has urged the government to rethink its approach to the apprenticeship levy set to be introduced from April 2017. 

The tax body believes that in its current form the legislation may mean that many smaller businesses will be unable to take full advantage of the £15,000 allowance.

The levy will be charged on an employer’s pay bill at a rate of 0.5%, payable through PAYE alongside income tax and national insurance. If there are more employers within the business, their bills will be added together.

CIOT has questioned the fact that only 1 employer will be entitled to the levy allowance and any remaining allowance will not be transferred to the other employers in the business. 

This could potentially impact smaller businesses whose total pay bill exceeds £3 million, leading to them paying more levy than they would have done if they had employed workers through a single company.

Colin Ben-Nathan, chair of the CIOT Employment Taxes Sub-committee, said:

“We believe that this situation is unfair and that the levy allowance should be available for offset against the combined pay bills of all employers where aggregation applies. We would therefore urge the government to reconsider the approach on this point.

“It seems to us that a better option would be to adopt the same approach as for the employment allowance and allow the levy allowance to be claimed in full, up-front, so that the Apprenticeship Levy is only paid when the pay bill first exceeds £3 million.”

Talk to us today to find out more about the apprenticeship levy.

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Reading Time | < 1 min 10 Mar 2016

Businesses not confident business rates will lead to local growth

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Half of businesses are not convinced that the additional income from business rates will be sufficiently invested to promote local growth, according to the Institute of Chartered Accountants in England and Wales (ICAEW).

George Osborne is expected to announce details on business rates for local authorities at the Budget on 16 March 2016. 

66% of businesses are aware of the Chancellor’s plans, however 46% are not confident that their local authorities would set suitable rates to support growth.

The ICAEW also reported that:

  • 72% of businesses want investment from business rates to improve local transport infrastructure
  • 55% want to attract more regional investment
  • 50% want investment towards superfast broadband, increased adult training (50%), building homes (41%) and creating more workspace (25%).
  • 60% of businesses in the North East, North West and Yorkshire want additional income to be spent on attracting more investment.

Stephen Ibbotson, ICAEW director of business, said: 

“Devolution was cited by the Chancellor as helping to attract investment and drive regional growth. But many businesses do not have confidence in their local authorities to invest any additional income raised through business rates in the right places. This is worrying given the expected economic slowdown and the increased pressure on UK plc.

“With economic growth expected to be revised down at the Budget and the amount of money spent on these projects, the Chancellor needs to start asking businesses what they really need to help them grow.”

Contact us today to discuss your business.

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