Annual tax returns are set to be abolished
By 2020, the annual tax return is set to be abolished as people “should not be working for the taxman”. Instead of filing tax returns, all the data needed by HMRC will be automatically uploaded into digital tax accounts. This should enable businesses to feel that they are paying a “single business tax”, according to the chancellor. The new digital tax accounts will also allow payments by direct-debit instalments which will make paying you tax bill easier. We will keep you informed as this progresses.
“Entrepreneurs’ relief will only be available to those selling genuine shares in businesses” in order to tackle tax avoidance. Although this will need clarifying in the future it is apparent that there are changes coming with regards to entrepreneurs’ relief.
Support for the creative industries
The creative and media industries are major contributors to the UK economy. With this in mind, the government is planning to increase its support with tax relief for the film industry increasing to 25%. The video gaming industry will receive up to £4m investment and the Skills Investment Fund will be extended for a further two years with £4m additional (match?) funding.
Corporation Tax cuts
From April, Corporation Tax for businesses making over £300,000 will come down to 20%. Corporation Tax for businesses making less than £300,000 will remain at 20%, making Corporation Tax “one of the lowest rates of a major economy in the world.”
Business rates review
A review of the current business rates system has been promised to bring the rates system in line with the modern economy. .This review is aimed at making high street retailers more competitive and should bring high street prices down for consumers.
The government will invest up to £600m in mobile networks and broadband speeds. Ultrafast broadband will be available to “almost all” UK premises. A high standard of internet access is seen as an economic catalyst for remote areas that still struggle with dial-up connections.
Frozen fuel duty
Fuel duty will once again be frozen - making this the longest freeze in fuel duty for 20 years. This will help motorists save “£10 a tank”. The freeze will give industries such as haulage room in which they can grow and create more jobs.
National Insurance cuts for the self employed
Class 2 National Insurance Contributions will be abolished under this government but further announcements are expected regarding this. This decision reflects the growing importance of the UK’s self employed who currently make up around 15% of the workforce and have accounted for around a third of growth in employment since 2010.
National minimum wage increase
From October, the national minimum wage will increase to £6.70. The national minimum wage for apprentices will increase by 20% to £3.30, representing the largest ever increase in the national minimum wage for apprentices.
Personal tax free allowance increase
The personal tax free allowance is set to increase to £11,000 in 2017/18. The basic rate limit for 2016 will be £31,900 and the higher rate limit will be £42,700. This will mean that the average person will be £900 better off with 27 million people enjoying a tax cut.
From April 2016, interest earned on the first £1,000 of savings will be tax-free for basic rate tax payers whether or not it is in an ISA. Also, from April 2015, the annual ISA contribution limit is due to increase to £15,240 and, in addition, new rules will mean that you are able take money out and replace it without it counting towards your annual ISA limit.