Key points from the Budget most likely to affect individuals and smaller businesses

Posted 08/07/2015

• Increased resources to enable HMRC to tackle non-compliance, avoidance and evasion. They aim to triple the number of criminal investigations that HMRC undertakes into serious and complex tax crime
• Digital tax accounts to replace annual tax returns for individuals and small businesses
• Direct recovery of debts from bank and building society accounts of tax debtors will be included in the Finance Bill (No2) 2015 and take effect from Royal Assent
• NICs (National Insurance Contributions) Class 2 to be abolished and Class 4 to be reformed
• As from 6^th April 2016 the annual allowance for pension saving will be tapered for individuals with incomes of £150,000 or more
• Lump sum pension death benefits on an individual over the age of 75 in most cases will be taxed at recipient’s marginal rate rather than the current 45% special lump-sum death benefits charge
• Increase in IHT band to allow parents and grandparents to pass on the family home to children and grandchildren without incurring IHT
• Personal allowance will increase to £11,000 in 2016/17 and £11,200 in 2017/18
• The basic rate threshold will increase to £32,000 in 2016/17 and £32,400 in 2017/18
• The higher rate threshold will increase to £43,000 in 2016/17 and £43,600 in 2017/18
• Dividend  tax credit for individuals will be abolished and it will be replaced with a new tax-free £5,000 dividend allowance, with effect from April 2016
• Changes to ISA rules to allow more freedom to withdraw and replace money without eroding  ISA subscription limit
• Permanent non-domiciled tax status abolished to ensure individuals who are UK resident cannot benefit from non-UK domiciled status indefinitely for tax purposes
• Personal savings allowance (PSA) will be introduced for basic and higher rate taxpayers from 6^th April 2016
• Corporation tax rate reduced to 19% from 2017 and 18% from 2020.