Here is a key point summary
Growth & Inflation
- Economy grew by 3% in 2014
- GDP growth forecast for 2015 revised down from 2.5% to 2.4% then to 2.3% in 2016
- 2015 borrowing forecast is revised down to £43.1bn
- Government debt as a proportion of GDP 79.1% for 2015/2016
- Savings of 12bn to come from welfare cuts and 5bn from tax evasion
- No changes for alcohol and tobacco
- From 2017, three new Vehicle Excise Duty bands will come into force for new cars in England only, starting at £140 annually. “Every single penny” from VED will go to a Roads Fund to fund improvements from 2020.
Personal Tax and Pension
- Inheritance tax threshold to rise from £325,000 to £500,000 per person This ostensively means that married couples and civil partners will be able to pass on assets worth up to £1m, including a family home, without paying any IHT at all.
- The personal income tax allowance will rise to £11,000 from April 2016
- Higher rate of tax threshold rises from £42,385 to £43,000 from April 2016
- Mortgage interest relief for buy-to-let homebuyers to be restricted to basic rate of income tax.
- Permanent non-dom tax that allows some UK residents to limit the tax paid on their earnings outside the country that are not brought into the UK was abolished. Anyone resident in the UK for more than 15 of the past 20 years will now pay full British taxes on all worldwide income and gains.
- The amount people can contribute to their pension tax-free to be reduced for individuals with incomes over £150,000
- Pensions tax annual allowance to be gradually reduced to a minimum of £10,000 from next year.
- New national living wage for all employees aged over 25, starting at £7.20 an hour from April 2016 and set to reach £9 by 2020
- Corporation tax will be cut to 19% in 2017