Whether you’re a student or homeowner, the new Budget will affect everyone in some way, take a look at what’s in store for you
On Wednesday the 16th of March, George Osborne current Chancellor of Exchequer made the 2016 Budget announcement in the House of Commons. With new measures based on cuts and savings, the government’s target is to substantially reduce the deficit — and even provide a surplus for 2019-2020. Here is what you should know.
Businesses will have to respect new rules, including changes in the interest payment or having to pay more royalties. Moreover, changes to business rates have been planned, this means that 600,000 businesses will not have to pay business rates from April 2017. Another advantage for the companies is the announcement of cuts to the corporate tax: more than 1 million businesses will benefits from 2020 with the 17 per cent planned cuts. Finally, new funding will be put in place especially in areas like Leeds, York, Calder Valley and Cumbria to protect houses and businesses from flooding.
2. Capital Gain Tax
The capital gain tax is the tax you have to pay when you sell something. Here again, big cuts will be seen: from 28 per cent to 20 per cent in three weeks.
Some changes have been included in this sector: a new tax on touring and temporary exhibitions from April 2017 will be discussed this year by the government and £20 million have been provided for cathedral repairs.
The new budget provides £285 million a year to set up longer days for 25 per cent of secondary schools. What’s more, every school in the country should be — or in the process of becoming — an academy or free school. It means that headteachers will have more control when it comes to making budget decisions, the idea being to reduce bureaucratic interference.
5. Emergency hostels and refuges
A new plan for refugees and those who need to leave emergency hostels will start with a £100 million investment in the project. A further £10 million have been promised towards the ‘Not a Second Night Out’ scheme — a program aimed at helping people who have recently slept on the streets to not repeat this experience.
6. Frozen duties
Duties related to alcoholic beverages such as beer, spirits and most ciders will be frozen this year, including fuel duty. Tobacco however, has not been as lucky as these products, and will suffer from a small tax on the cheapest cigarette packages.
7. Oil and gas industry
Osborne signalled an end to the Petroleum Revenue Tax and a reduction of 10 to 20 per cent on the supplementary charge of oil and gas extraction.
8. Saving: Lifetime ISA
Any adult under 40 will have the opportunity to open a Lifetime ISA from April 2017. It will be possible to save up to £4,000 each year and the money could be used for retirement or buying a new house. Every year, account owners will receive a 25 per cent bonus from the government.
9. Sugar levy
From April 2018, companies which produce soft drinks with added sugar will have to pay a new tax. It concerns items with more than 5 grams of sugar per 100 millilitres — with an exception for milk and juice drinks. Aimed at fighting obesity, the money collected with this tax will double the funding in schools for sports courses.
10. Tax allowance increases
The personal allowance — the amount of money you should be earning before being liable to pay income tax — will increase to £11,000 in 2016 and then to £11,500 in 2017; currently it stands at £10,600. The target is to reach £12,500 by 2020. However, this policy has been criticised for benefiting only the upper and middle class, and some from the lower class, but not the population as a whole.
11. Transport and infrastructures
Improving connections to the northern cities is one of the objectives. £60 million has been allocated to improve transport from Leeds to Manchester, with an expected 30-minute cut in the journey times. A further £80 million will be provided to continue planning Crossrail 2 which aims to connect South-West and North-East London. The government also confirmed planned road improvements.
Good news for veterans: from April 2017, they will no longer have to use their pensions to pay for social care. The new measures aim to give them the opportunity to preserve their pensions.