Budget 2015 Summary
In our previous blog post, we had mentioned about Budget 2015 leaks. While some may have come true, there are other announcements which have made to the list.
The Chancellor of the Exchequer, George Osborne delivered his sixth Budget to Parliament on March 18, 2015. Here is a summary of the key announcements in his budget.
1. The UK had the fastest growth in economy in 2014
The UK economy grew 2.6% which made it the fastest growing economy in 2014. In 2015, the economy is predicted to grow 2.5% before reaching up to 2.4% in 2019. Likewise, the inflation is forecast to fall to 0.2% this year.
2. Debt will be falling as a share of GDP in 2015-16
Debt as a share of GDP will fall 80.4% in 2014 to 80.2% in 2015-16 and before reaching 71.6% in 2019-20.
3. The tax-free personal allowance is being increased in April 2017
The tax-free personal allowance will rise to £10,800 in 2016-17, and £11,000 the year after. The personal allowance from £6475 in 2010 to £11,000 in 2017-18 will save a typical taxpayer £905.
4. A new Personal Savings Allowance will be introduced
From April 2016, a tax-free allowance of £1,000 will be introduced for the interest that people earn on savings. If the basic rate taxpayer has a total income up to £42,700 a year, they will be eligible for the £1,000 tax-free savings allowance. However, if the income is from £42,701 to £150,000, they’ll be eligible for a £500 tax-free savings allowance.
5. Introducing the Help to Buy ISA
The government introduces Help to Buy ISA to help first time buyers save for a deposit. Now, people can open an ISA and save up to £200 a month towards their first home and the government will boost it by 25% as it puts £50 bonus for every £200 people save.
6. People can take money out of an ISA and put it back in later in the year
People will not lose their ISA tax benefits when they take out their money and put it back in later within the same year. However, this is possible only if the repayment is made in the same financial year as the withdrawal.
7. £1.25 billion for children’s’ mental health services
For the mental health services for children, an extra £1.25 billion will be spent.
8. Cancelling the fuel duty increase scheduled for September
Fuel duty will be frozen again. By the end of 2015-16, the fuel duty for five years makes it the longest duty freeze in over 20 years.
9. Cutting beer duty for the third year in a row
Beer duty is reduced to 1p a pint and cider to 2p. Also, a 2% is cut in excise duty on wine, whiskey and other spirits.
10. Five million pensioners can sell their annuity for a cash
From April 2016, people who already have an annuity have the freedom to sell it on for cash. This means people can sell an annuity and pay their usual rate of tax
they pay on income instead of 55% which they are paying currently.
11. Charities can claim more gift aid on small donations
The small donations charities can get an extra 25% top up payment on gift aid without needing any paperwork. This makes an increment from £5,000 to £8,000 a year.
12. Farmers will have more time to average their profits for income tax
Farmers will be given more time extending the period from two to five years to average their profits for income tax.
13. Abolish annual tax return
Annual tax return will be put to an end.
14. Support for all regions across the UK
The government plans to improve the rail connections between the major cities of the north. It also plans to support local areas for transport, business support and skills for West Yorkshire.
15. Making sure banks pay their fair share
From 1 April 2015, the government will increase the rate of the bank levy and plans to raise an additional £900 million a year.
16. Increased support for the oil and gas sector
From 1 January 2015, the government will reduce the tax charge on oil and gas companies from 30% to 20%. Also, the rate of tax paid on older oil and gas fields will be reduced from 50% to 35%.
17. Faster broadband and better mobile networks
The government will be investing up to £600 million on ultrafast broadband of at least 100 megabits per second to deliver better mobile networks in the UK premises.
18. Loans for postgraduate research students
For all the postgraduate PHD and masters research students, loans up to £25,000 will be available.
19. Further investment in science and innovation
The government will be investing £140 million in world class research on the infrastructure. The government is also launching a new UK research initiative in the digital currency technology with a £10 million support.
20. The government will consult on a tax relief for local newspapers
The government will announce a consultation for the local newspapers on how to can provide them with tax support.
These are key points of Budget 2015 that was unveiled on March 18, 2015.