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.

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