Personal – Income Tax

The tax-free personal allowance will rise from £11,000 in April 2016 to £11,500 in April 2017
Threshold at which people pay 40% income tax will rise from its current level of £42,385 to £45,000 in April 2017.
Short-term landlords, such as those using the Airbnb platform, have been handed a new £1,000 tax-free allowance on income from such rentals.
Class 2 NICs are to be abolished from 2018, providing all self-employed workers with an annual tax cut of £130 per annum, without affecting state pension entitlements and other benefits.
As previously announced, a personal savings allowance will apply from 6 April 2016 so the first £1,000 of savings income for basic rate taxpayers and £500 for higher rate taxpayers will be tax free. There is no allowance for additional rate taxpayers.
From April 2018, employers’ national insurance will be due on all termination payments in excess of £30,000. There remains an income tax and national insurance exemption on non-contractual redundancy or termination payments made up to £30,000, as well as an employee national insurance exemption on termination payments in excess of £30,000.

Personal – Capital Gains Tax

For disposals after 6 April 2016, the higher rate of CGT will be cut from 28% to 20%, with the basic rate of CGT cut from the current 18% rate to 10%.
The old higher rates will still apply to gains on the sale of a residential property that is not a main home (such as a second home or a buy-to-let property), and also to “carried interest”.
The annual exemption for 2016-17 is £11,100 for individuals and £5,550 for trustees; this remains unchanged.
Personal – ISA Reforms

The annual ISA allowance will be increased from £15,240 to £20,000.
A new Lifetime ISA will be introduced for adults under 40, with investors receiving a 25% government bonus. From April 2017 they will be able to put in up to £4,000 a year, with the annual bonus of up to £1,000 paid until the age of 50. Income and gains within the ISA will be tax-free.
Savers would be able to withdraw money from a Lifetime ISA at any time but it is intended that funds from a lifetime ISA can be withdrawn for specific ‘life events’ free of any penalties or charges, which include withdrawals at any time to purchase a first home up to a value of £450,000 or withdrawals after the individual has turned 60.
Otherwise, withdrawals for unapproved purposes will mean the 25% government bonus is lost and a 5% ‘early’ withdrawal charge applies. The government is considering whether withdrawals relating to other life events should qualify for the full ISA benefits.
Personal – Other

Commercial stamp duty will be overhauled with the introduction of a 0% rate on purchases up to £150,000, a 2% rate on the next £100,000 and a 5% top rate above £250,000.
Business Tax

For the 2016-17 financial year the rate of corporation tax is 20%.
The corporation tax rate was due to reduce to 19% from 1 April 2017, and then to 18% from 1 April 2020. It is now proposed that the rate will reduce to 17% from 1 April 2020.
Business rates relief will be permanently cut for any business with a rateable value of less than £12,000, up from £6,000 last year. This is estimated to result in around 600,000 commercial properties will be removed from the rates tax permanently
From 1 April 2016, VAT registration will be required where taxable turnover exceeds £83,000. The current limit is £82,000. From the same date, the de-registration threshold will increase to £81,000, also an increase of £1,000.
The tax deposits payable for loans made to directors/shareholders from a close Limited Company will increase from 25% to 32.5% with effect from 6 April 2016.
Business Tax – Other

In December 2015 HMRC published a consultation paper and draft legislation to combat ‘phoenixism’ – where a company does not pay dividends but instead is liquidated, generating a capital gain which might qualify for entrepreneurs’ relief. The business owner then begins to trade again through a new company.
The draft legislation proposed a new anti-avoidance rule which can change the tax treatment of liquidation distributions from capital gains to dividends. It was confirmed in the Budget that these draft new rules will be introduced with effect from April 2016, but the final details are currently in consultation.
Although it was widely expected that the Budget would include measures to counteract personal service companies being used to avoid payroll taxes, the announced changes apply only in cases where the engaging entity is a public sector body.