How the Budget may affect you and your business
By John McGhee,
SELECT Secretary and Head of Resources
Since the last edition of Cabletalk George Osborne has delivered his first Conservative Government Budget and the key outcomes are summarized below:
Corporation tax - will be reduced from 20 per cent to 19 per cent in 2017 and 18 per cent in 2020.
Personal allowance - will increase from £10,600 2015/16 to £11,000 in 2016/17 and £11,200 in 2017/18.
Inheritance tax (IHT) - new measures are being introduced to remove the majority of family homes from the Inheritance Tax net, where the residence is left to children or grandchildren.
Pensions - From 6 April 2016, the Lifetime Allowance for pensions' contributions will reduce to £1m. From April 2016 the annual allowance benefits of pensions tax relief will be tapered for taxpayers earning above £150,000.
Insurance Premium Tax – from 1st November 2015, the tax rate will be increased from 6 per cent to 9.5 per cent
Employment Allowance – The NIC Employment Allowance will from April 2016 be increased from £2,000 to £3,000.
Whilst the reduction in Corporation tax, the increase in Employment Allo wance and the increases in the Personal allowances are to be welcomed, the increase in the Insurance Premium Tax from 6 per cent to 9.5 per cent seems to have slipped under the radar of most commentators.
This is an increase of over 58 per cent in the tax which is applied to all insurance products and unlike VAT is not recoverable, so we will all, whether as individuals or businesses, feel the effect of this as it will increase the cost any insurance that you buy whether it be Public/Product Liability and Vehicle insurance for your business or Buildings/Content and car insurance as an individual. It will also affect our own Welfare Credit rates as these are classed as an Insurance product and are therefore liable for Insurance Premium Tax.