Following last week’s Summer Budget, the government has published the Summer Finance Bill 2015 to implement tax changes announced over the last year.
It includes action by the government to make sure that people keep more of the money they have worked hard to earn, including:
- legislating to rule out increases in income tax rates and VAT for the duration of this Parliament
- increasing the Personal Allowance to £11,000 in 2016-17 and £11,200 in 2017-18 giving a typical basic rate taxpayer an extra £120 back in their pocket in 2017-18
- increasing the point at which you pay the higher 40p rate of tax to £43,000 in 2016-17 and £43,300 in 2017-18
- increasing the effective inheritance tax threshold for married couples and civil partners to £1 million in 2020-21.
The Bill also contributes to the government’s commitment to build fair and competitive tax regime that supports investment and drives productivity in the UK - this bill implements key policies such as:
- cutting the corporation tax rate to 19% in 2017 and 18% in 2020, benefitting over 1.1million businesses
- setting the Annual Investment Allowance at the permanent higher level of £200,000 for the rest of the parliament.
Finally, the Bill will secure the UK’s economic recovery by:
- tackling tax evasion, avoidance, tax planning and increasing tax compliance
- ensuring banks pay their fair share of tax by introducing a new 8% tax on banking sector profits from January 2016
- restricting pensions tax relief for top earners by reducing the annual allowance for those with a total income of over £150,000.
David Gauke, Financial Secretary to the Treasury, said:
The government is committed to securing Britain’s future. That’s why we are making sure hardworking people can keep more of the money they earn, helping millions of businesses invest in the equipment they need to grow, and ensuring individuals and companies pay their fair share of tax.
The legislation published today builds on our efforts to create a stable tax system that supports our long-term economic plan.