Budget 2015: Key Points

George Osborne has delivered his seventh Budget as chancellor, the first for a majority Conservative government since November 1996.

The main tax announcements are summarised as follows:

Personal taxation

• A new national living wage will be introduced for all workers aged over 25, starting at £7.20 an hour from April 2016 and set to reach £9 by 2020 - giving an estimated 2.5 million people an average £5,000 rise over five years.
• The inheritance tax threshold will increase to £1m, phased in from 2017 and underpinned by a new family home allowance.
• The personal allowance, at which people start paying tax, rises to £11,000 next year. The government says the personal allowance will rise to £12,500 by 2020, so that people working 30 hours a week on the minimum wage do not pay income tax. Also, the point at which people start paying income tax at the 40p rate to rise from £42,385 to £43,000 next year, going up to £50,000 by the end of this parliament.
• However, on the downside, mortgage interest relief is to be restricted to basic rate of income tax for property investors.

Business taxation

• Corporation tax is to be cut again to 19% in 2017 and 18% in 2020.
• Permanent non-dom status is to be abolished. This means that with effect from April 2017, anyone who has lived in the UK for 15 of the past 20 years will pay same level of tax as other UK citizens, raising an estimated £1.5bn.
• A further £7.2bn is to be raised from a clampdown on tax avoidance and tax evasion with HMRC's budget for this being increased by £750m.
• The bank levy rate is to be gradually reduced over the next six years and a new surcharge on bank profits will be introduced from 2016.
• National Insurance employment allowance for small firms will be increased by 50% to £3,000 from 2016.
• Dividend tax credit is to be replaced with a new tax-free allowance of £5,000 on dividend income. Rates of dividend tax will then be set at 7.5%, 32.5% and 38.1%.

Opinion

All in all not a bad budget from the chancellor, with many more "giveaways" than had been mooted in the media ahead of his speech. Certainly the further cut to the rates of corporation tax came as a shock to many, although it will be welcomed. Another interesting change was the restriction of mortgage interest rate relief for buy-to-let investors. Surely these two changes will see investors seeking to undertake their property activities through a corporate structure now rather than personally?

As ever, the devil is in the detail and over the coming days I will be very interested to pore over the draft legislation coming out of HM Treasury, as you can always guarantee that there will be more than a few provisions, especially anti-avoidance measures, hidden in the small print. Watch this space...