The Budget 2016: Key Points | Aston Shaw

The Budget 2016: Key Points

March 2016

Today, the Chancellor of the Exchequer, George Osborne delivered his eighth budget. In this article, we’ll highlight the key points that were announced.

Initially, the budget started rather pessimistically, with warnings of ‘storm clouds forming over the global economy’. One of the first things to be mentioned was that growth forecasts for the UK economy will be cut for the next 5 years.

Budget 2016 – Main Points

Economic Forecasts

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The growth forecasts for the next 5 years have been revised down significantly; the OBR had previously forecast that the economy would grow by 2.4% this year, it has now been reduced to 2.0%.

Growth in the next two years has been cut by 0.3 percentage points while 2019 and 2020 are down from 2.3% to 2.1%.

George Osborne attributes this failure to meet forecasts to a reduction of the levels of growth expected elsewhere in the world. Despite this, the Chancellor has claimed the UK will still grow faster than any western economy.

Public Borrowing

Inflation

Sugar Tax

Rumours about a sugar tax have been circulating for some time now, but now the introduction of a sugar levy has been confirmed. The notion of a levy on sugary products has proven controversial, with some branding the idea as ‘nanny statism’. On the other hand, some believe it to be a viable and practical way to tackle Britain’s growing obesity problem.The levy only applies to soft drinks, with pure fruit juice and milk being excluded. The levy will be calculated based on the levels of sugar in sweetened drinks. There will be two bands on which the levy will be based.

Tax Avoidance

Fuel Duty

Flood Defences

Key Points For Individuals

Personal Taxation

In terms of taxation, good news has been announced for both higher and lower earners:

Alcohol and Tobacco

Pensions and Savings

Key Points For Businesses

What Else Was Announced?

Local Focus

Our Tax Consultant, Philip Hunt commenting on the budget said. “George Osborne very much focussed on the fact that this was a budget for the next generation. Whilst there was some good news, the changes to business rates, the further eventual reduction in Corporation Tax, the increase in Personal Allowances and expansion of the basic rate tax band, he has made matters more complex with his changes to ISA’s and Capital Gains Tax the changes to which don’t apply to residential accommodation It seems that once again the buy to let market is being penalised, although this matter wasn’t actually included in his speech. Whilst he was very bullish when he gave his speech, my feeling is the budget was rather neutral. I wonder if the attack on Personal Service Companies in the public sector will be the start of an attack on these generally. Only time will tell.”

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