Tax changes to support hardworking families, incentivise business investment in the UK and create a fairer tax system.
It includes action by the government to support hardworking families keep more of their hard-earned money by:
- increasing the personal allowance by an extra £400 to £11,000 from April 2017 so that a typical rate taxpayer will be £905 better off compared to 2010, and an individual on the National Minimum Wage working up to 30 hours a week will not pay any income tax
- exempting children from Air Passenger Duty so that, taken together with measures introduced in Finance Act 2014, a family of four flying to Australia will save £194
The bill also contains key policies to make the UK more competitive for business, such as:
- supporting investment in the crucial UK oil and gas industry through cutting the Supplementary Charge by 12%, cutting the Petroleum Revenue Tax from 50% to 35% and introducing two new allowances
- increasing the tax credits available for large and small businesses investing in research and development
- a new tax relief to promote the production of children’s TV in the UK, and further support for high-end TV and film tax.
Finally, the bill legislates to create a fairer tax system, by clamping down on tax avoidance and ensuring that banks contribute their fair share. This includes:
- introducing a new Diverted Profits Tax of 25%, aimed at multi-national companies that artificially shift their profits offshore to avoid paying UK tax
- putting a stop to unfair tax avoidance - raising nearly £2.5 billion by 2019/20 to support the economic recovery
- increasing the bank levy and introducing new rules for banks – raising nearly £8 billion over the next 5 years
David Gauke, Financial Secretary to the Treasury, said:
The government is committed to supporting hardworking families and backing business. That is why we are making it easier for them to keep more of their hard earned money and access the help they need to grow.
The legislation published today builds on our efforts to create a stable tax system that supports our long-term economic plan.
The measures contained in the bill were announced by the Chancellor at Budget 2014, Autumn Statement 2014 or Budget 2015.