2016 Budget Highlights

Treasury Chancellor George Osborne has announced his 2016 Budget. Here is the summary of the key changes in the Budget:

Personal Allowance increased from £10,600 to £11,000. This is forecast to reach £11,500 by 2018.

Higher rate Threshold increased from £42,385 to £43,000.

From 6 April 2016, the dividend tax credit will be abolished and replaced with a £5,000 tax free allowance and an increase for dividend tax rates to 7.5% for basic rate, 32.5% for higher rate and 38.1% for additional rate taxpayers.

Capital gains tax will be cut from 18% to 10% in 2016/17 for the basic rate and from 28% to 20% for the higher rate. However, the main rates will continue for residential property.

The Section 455 tax on Directors’ loans will increase from 25% to 32.5% from 6 April 2016.

The Annual Investment Allowance for Companies will continue at £200,000.

Class 2 National Insurance contributions for the self employed to be abolished from 6 April 2018.

A more detailed analysis of the Budget will follow. Please monitor the website for updates. Belsize Accountancy are specialist accountants for contractors and small businesses.