The budget on 8th July introduced a number of new measures, which we summarise below.

For Businesses

The Annual Investment Allowance:
  • Currently a maximum of £500,000 on qualifying plant and machinery
  • Reduced to £200,000 from 1st January 2016
The Employment Allowance:
  • Increases to £3,000 from April 2016
  • Companies where the director is the sole employee are ineligible to claim
Corporation Tax:
  • Reduced to 19% for financial year beginning 1st April 2017
  • Further reduced to 18% for financial year beginning 1st April 2020
Apprenticeships Levy:
  • Paid for by large UK employers, employers will be able to access funding for apprenticeship training
The National Living Wage:
  • For workers aged 25 and over – £7.20 per hour from April 2016

For Individuals

Personal Allowance for Income Tax:
  • Increased to £11,000 for 2016/17, basic rate increases to £32,000
Inheritance Tax Allowance:
  • Introduction of a nil-rate band for residences to passed to a direct descendant on death
  • £100,000 in 2017/18, increasing annually by £25,000 to £175,000 in 2020/21
  • Affects individuals (with direct descendants) who have an estate with a main residence with total assets above the IHT threshold of £325,000
Pensions Annual Allowance:
  • From 6th April 2016, for those with incomes above £150,000, the allowance will be tapered down to £10,000
Dividend Tax Reforms:
  • From April 2016, the Dividend Tax Credit will be replaced by an annual Dividend Tax Allowance of £5,000
  • Tax rates on dividends will be 7.5% for basic-rate taxpayers, 32.5% for higher-rate taxpayers and 38.1% for additional-rate taxpayers