Chancellor George Osbourne delivered his 2016 Budget to Parliament on Wednesday 16th March. He stated that “this is a Budget for the long term”, but that the “storm clouds are gathering”.

The key announcements were as follows:-

• An increase in the personal allowance for income tax to £11,500 for 2017/18
• Higher rate threshold for income tax to rise from £43,000 in 2016/17 to £45,000 in 2017/18
• From 6 April 2016, capital gains tax rates will be cut from 28% to 20% for the higher rate and from 18% to 10% for the basic rate but this reduction will not apply for the disposal of residential property
• Corporation tax rates will be reduced from 20% to 19% for all companies from 1 April 2017 and then to 17% from 1 April 2020
• From April 2018, Class 2 National Insurance Contributions (NIC) will be abolished
• From April 2016, the annual Employment Allowance for employers NIC increases from £2,000 to £3,000. Companies with a director as a sole employee will no longer be able to claim the allowance
• From 6 April 2016, the first £5,000 of dividends are tax free but the dividend rate will increase from 0% to 7.5% for basic rate taxpayers, from 25% to 32.5% for higher rate taxpayers and from 30.6% to 38.1% for additional rate taxpayers
• From 1 April 2016, the new National Living Wage will be introduced for workers aged 25 and above
• From 1 April 2016, higher stamp duty land tax will be charged on individuals purchasing a residential property if they own two or more residential properties
• From 6 April 2017, the annual savings limit for ISAs will increase from £15,240 to £20,000 and a new Lifetime ISA for adults under 40 will be introduced
• From April 2017, the Small Business Rates Relief threshold for 100% relief will rise from £6,000 to £12,000
• From 6 April 2016, the rate of tax charged on loans to participators from close companies will increase from 25% to 32.5%