Chancellor George Osborne delivered the first Conservative Party Budget in 18 years on Wednesday, after his party’s surprise election victory in May.
The big takeaways are a new national living wage of £7.20 an hour starting next April; a reduction in corporation tax to 18% by 2020; an increase in the tax free allowance; and £12 billion worth of benefit cuts.
Here are all the key points from the Summer Budget:
- Tax free allowance raised to £11,000. Threshold for top rate of tax raised to £43,000.
- Reduction of tax relief for buy-to-let landlords.
- Inheritance tax threshold raised to £1 million.
- Extra £250 million funding for HMRC to crack down on avoidance and evasion.
- Permanent non-dom status abolished — those who’ve been living for more than 15 of the last 20 years in the UK subject to full UK tax.
- Benefits for 18-21 year olds scrapped, replaced by “Youth Obligation” to “Earn or Learn.”
- Freeze on working age benefits for 4 years.
- Social housing rents reduced by 1% a year for the next 4 years, to be funded by councils.
- Benefits cap lowered from £26,000 to £23,000 in London and £20,000 outside of London.
- Child tax credits limited to first 2 children.
- Apprenticeship levy charged to all big companies to encourage them to set up training schemes.
- Plans for 3 million new apprenticeships.
- University maintenance grants scrapped, replaced by loans.
- 1% pay rise a year over next four years.
- Additional £8 billion of NHS funding this year.
- Bank levy phased out over the next 6 years, replaced by 8% surcharge on bank profits.
- Corporation tax cut from 20% to 19% in 2017 and 18% by 2020.
- R&D allowance of £200,000 a year for businesses.
- Additional powers devolved to Manchester’s new Mayor over fire service, land commission, children services and employment.
- Plans for devolution and elected Mayors in Sheffield, Leeds and West Yorkshire.
- £30 million funding for Transport for North to create “Oyster-style” joined up transport system.
- New Enterprise Zones across England.
- Elected Mayors to have powers to set Sunday trading hours for shops.
- Overhaul of car taxes to include all new vehicles, scrapping allowances for green cars.
- £140 a year new vehicle excise duty.
- Paid directly into new “Roads Fund”, spent on maintaining roads.
- 2% of national income to be spent on defence budget, in line with NATO recommendations.
- New Join Security Fund of £1.5 billion to be created by the end of Parliament.
- Fiscal charter announced that commits governments to running a budget surplus — spending less than it collects in taxes.
- Government forecast to hit budget surplus by 2020, not 2017/18 as previously promised.
- UK’s growth in 2014 revised up to 3% from 2.6% by Office for Budget Responsibility.
- OBR forecasts 2.4% growth this year, 2.3% in 2016, and 2.4% in 2017, revised up from 2.3%.
- OBR forecast 1 million more jobs over the next 5 years. Conservatives want 2 million more.
- National living wage of £7.20 an hour, starting next April. Paid to all workers over 25, rising to £9 an hour by 2020.
- BBC to fund free TV licenses for over 75.
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