Well, the 2015 budget is in and it looks as though George Osborne’s seventh Budget as chancellor is full of some major, and minor, changes. To fully understand these changes would be to go through every one and break it down showing how it affects each and every one of us, but that would take days. For that reason, we here at Capium has chosen to provide our readers with some of the highlights of UK Budget 2015.
Personal taxation and pay
- The national living wage for workers over 25, will increase to £7.20 an hour from April 2016 topping out at £9 by 2020.
- There will be an increase in the inheritance tax threshold up to £1m
- Personal allowances are set to rise to £11,000 in 2016 rising to £12,500 by 2020.
- Mortgage interest relief for homebuyers choosing to let their properties will now be restricted.
Welfare and pensions
- Both individual tax credits and the Universal Credit will be restricted to two children.
- Tax credit income thresholds are decreased from £6,420 to £3,850.
- Working-age benefits will be frozen for four years.
- Disability benefits will no longer be taxed.
- The new “earn to learn” obligation will end automatic housing benefits to 18-21 year olds.
- Tax free pension contributions to be reduced for individuals with incomes over £150,000.
- A reduction in the annual household benefit cap to £23,000 in London and £20,000 in the rest of Britain will also be seen.
The state of the economy
- The UK’s economy has grown by 3% last year.
- There is a forecasted growth of 2.4% for 2015.
- An expected one million jobs will be created by the year 2020.
- Public spending will rise £83.3bn higher than previously projected.
- Borrowing set to fall from £69.5bn this year to £43.1bn, £24.3bn and £6.4bn before reaching a £10bn surplus in 2019-20
- National debt is set to fall from 80.3% this year.
- The public sector can expect a 1% pay rise annually over the next four years.
- New spending cuts are expected to total £37bn by 2020.
Alcohol, tobacco, gambling and fuel
- Fuel duty will see no increase.
- Vehicle excise duties will see a major reform with funds pegged for road building and maintenance.
- No new alcohol and tobacco duties in this budget.
- A reduction in corporation taxes from 2017 until 2020.
- Non-dom status to be abolished which is set to raise an estimated £1.5bn in revenues.
- A clampdown on tax avoidance and tax evasion will raise £7.2bn.
- An 8% surcharge on bank profits introduced from 2016
- Large employers will see a new apprenticeship levy.
- Small firms will see an increase in National Insurance employment allowance by 50%.
- New rates of dividend taxes to be set at 7.5%, 32.5% and 38.1%.
Health and education
- An additional £8bn will be diverted to the NHS by 2020.
- Student maintenance grants to be replaced with loans from 2016-17.
- £50 million will be allocated to expand the number of cadet units in state schools.
- Fire services, planning and children’s services in Greater Manchester will be controlled by a newly founded consortium of 10 councils.
- Funding totaling £30m will be allocated for new, Transport for North, designed to promote integrated transport.
- UK government to spend minimum of 2% of GDP on defence annually.
- A newly created £1.5bn Joint Security Fund will be created to further future investments in military and other intelligence agencies
- All recipients of the Victoria Cross and the George Cross will see annual pension annuities rise from £2,129 to £10,000.
And that’s the short version of UK Budget 2015. We did our best to cover the important topics as well as those topics that affect a higher percentage of people living in the UK. If we missed anything, it isn’t because it wasn’t important enough or that we didn’t believe in the changes.
What do you think of the new changes? Are they what you were expecting or did you want to see something more? Leave us a comment and let us know.