Summer Budget 2015

This budget introduces a new National Living Wage for workers aged 25 and above aiming to reach over £9 by 2020. It reduces taxes on working people by further increasing the personal allowance to £11,000 in 2016-17 and the higher rate threshold to £43,000. From September 2017 free childcare entitlement will be doubled from 15 hours to 30 hours a week for working parents of 3 and 4 year olds and the next stage of welfare reform is set by freezing working-age benefits and local housing allowances for 4 years, reducing rents in social housing by 1% a year for 4 years and reducing the benefit cap. The dividend tax credit will be replaced with a dividend tax allowance of £5,000 and new dividend's tax rates set. Family homes are taken out of inheritance tax for all but the wealthiest with a new transferable nil-rate band of up to £175,000 per estate when a main residence is passed to direct descendants bringing the effective tax inheritance tax threshold to £1 million. This will be paid for by a taper to the annual allowance for pensions tax relief for those with a total income over £150,000. The standard rate of insurance premium tax is increased from 6% to 9.5%. Mortgage interest relief for landlords is restricted to the basic rate of income tax, phased in over 4 years. Permanent non-domicile status is also ended. Corporation tax rate will be cut to 19% in 2017 and 18% in 2020; the level of the annual investment allowance set to £200,000 from January 2016; the employment allowance raised to £3,000 from April 2016; a levy on large employers to fund 3 million new apprenticeships will be introduced; and university maintenance grants will be converted to loans.