2016 Budget Summary
The chancellor delivered what he called "a Budget that backs small businesses" yesterday, by announcing a further reduction in the corporation tax rate to 17% in 2020, a business rates overhaul and a reduction in Capital Gains Tax.
However, the reality is that these are small sweeteners after the previous budget.
The main announcements that will have an impact on my clients are as follows:
Corporation tax to be reduced to 17% by April 2020
Increasing small business rate relief to properties with a rate able value of £15,000
More flexible use of corporation tax losses from April 2017
Reducing capital gains tax from 28% to 18% for the higher rate and from 18% to 10% for the basic rate. There is an 8% surcharge for gains on residential property.
Reform of the stamp duty on commercial properties by removing the "slab" system, and applying the same basis as residential property.
Increase of in the tax on loans to participators from 25% to 32.5%
Employers national insurance will be applied to termination payments over £30,000
The personal allowance will increase to £11,500 from April 2017, and the higher rate threshold to £45,000.
A lifetime ISA is being introduced for those under 40 where the government will contribute up to £1,000