Growth
Economy grew 3% in 2014
OBR has re-set growth figures to 2.4% this year but Chancellor stated still have strongest economic growth of developed world
2016 2.3%, 2017 revised up 2.4% then strong for rest of decade
Targeting 2m more jobs this parliament
Deficit
Forecast to fall to 3.7% – one third of what it was
OBR stated it will then fall to 2.2% in 2016/17, 1.2% in 17/18, 0.3% in 18/19 then surplus (1 year later than planned)
Housing
3 important changes:-
BTL mortgage interest relief restricted to basic rate of income tax – phased 20% rather than 40%
Rent a room relief rise to £7,500
IHT £175k relief when leave home to kids on top of £375k – therefore £500,000 new IHT threshold per person
Tax
Personal Tax allowance rise to £11,000
40% Higher Rate banding moved from £42,385 to £43,000
Company & Employment
New National Living Wage compulsory from April for over 25 – starting at £7.20 per hour and rising to £9 per hour over time (min. wage £6.50 today).
Tax & NI cut for small businesses to offset this – allowance increased by 50% to £3,000 from 2016
Apprenticeship levy on all large firms
Corporation tax reduced to 19% in 2017 and 18% in 2020
Public Sector Pay
Public sector pay rises capped at 1% next 4 years
Tax Avoidance
Boosting HMRC to go after tax fraud and offshore trusts
Name and shame users of avoidance schemes
Personal service and disguised employment targeted
Permanent non-dom tax status abolished from April 2017 – if in UK 15 out of last 20 years full tax on worldwide assets – raise £1.5b
Bank Levy
Will gradually reduce rate over next 6 years (hope to appease those thinking of leaving country), but will charge 8% surcharge on bank profits from next year
Cars
New vehicle excise duty of 3 bands for new cars only – low, standard £140 per annum and premium – existing cars stay same – No MOT till 4 years rather than 3
New Roads Fund financed by every penny of above
Benefits
Social housing rents reduced by 1% per annum for next 4 years
Rents must now be paid at market rate for those in Social Housing with higher incomes
Annual tax relief on pension contributions to be limited to £10,000 a year
No automatic housing benefit for 18-21 year olds
Disability benefits not means tested and not taxed
Working-age benefits frozen for four years
Tax credits and Universal Credit restricted to two children, for those born after April 2017
Other
Cap on charges imposed by claims management companies and an increase in insurance premium tax to 9.5% from November
Replace maintenance grants with loans for new students – increased to £8,200 and only repayable if earning above £20k ish
Free child care up to 30 hours per week
Nothing on booze or fags
Think that’s about it! Commentary to follow…