Summer Budget 2015: Round-up

Published by Mark King on 08 July 2015.
Last updated on 09 July 2015

Houses of Parliament

Chancellor George Osborne delivered his post-election 'blue' Budget on 8 July 2015. Here you'll find all the key points from his speech, which lasted well over an hour and was notable for welfare cuts, reduced tax relief for buy-to-let landlords, inheritance tax changes and the introduction of a new compulsory National Living Wage.

Quotes
“The British economy I report on today is fundamentally stronger than it was five years ago. We’re growing faster than any other major advanced economy. Our businesses have created two million more jobs. Living standards are rising strongly. Our long-term economic plan is working.”
"You only have to look at the crisis unfolding in Greece as I speak, to realise that if a country’s not in control of its borrowing, the borrowing takes control of the country."
"This is a Budget for working people, that sets out a plan for Britain for the next five years, [building towards] a higher wage, lower tax, lower welfare country."
"The greatest mistake this country could make is to believe all our problems have been solved."This is a one-nation government that does the best thing for the economy and the right thing for the country."
"This is a big Budget for a country with big ambitions."
“We should always fix the roof while the sun is shining.”
"Britain deserves a pay rise and Britain is getting a pay rise."

Economy

OBR forecast report for economic growth in 2015 is 2.4% - strongest of any major advanced economy in the world – then 2.3% in 2015 and 2.4% the year after.

Deficit to be cut at the same pace as last Parliament. It was 10.2% of GDP in 2010. In 2015-16 it is forecast to be 3.7%, then: 2016-17, 2.2%; 2017-18, 1.2%; 2018-19, 0.3%; 2019-20, +0.4%; 2010-21, +0.5%.

Employment

OBR forecasts 1 million more jobs over next five years, but the government wants to create 2 million more jobs.

Public sector pay rises of 1% a year for the next four years.

National, compulsory living wage of £7.20, rising to £9 an hour by 2020.

Health

NHS to receive a further £8 billion by 2020 on top of the £2 billion received this year.

Tax

Will boost HMRC’s capacity with a £0.75 billion investment, to help raise £7.2 billion in extra tax.

Abolition of permanent non-domicile status by April 2017 so that non-doms pay same tax rate as everyone else, raising £1.5 billion in tax revenues.

A £175,000 inheritance tax allowance for your home when left to children or grandchildren, transferable to spouse. It means you can pass on £1 million to descendants free of tax.

Corporation tax rate cut to 19% from 20%.

Insurance

Charges cap on claims management firms.

Transport

New Vehicle Excise Duty (VED) bands for new cars from 2017, set by emissions, to fund a new roads fund.

Fuel Duty to remain frozen this year.

Education

From 2016-17 academic year, Student Maintenance Grants to be replaced by new loans to be repaid when recipients earn £21,000 a year.

Consultation on freezing loan repayment threshold at £21,000 for five years.

Property

From April 2017, mortgage interest tax relief on buy-to-let property will be restricted to the basic rate of tax, but to be phased in.

Investments

Tax credits on dividends to be replaced by a new £5,000 annual dividend allowance. It means 15% of people who earn (or pay themselves) dividends will pay more in tax.

WelfareFree TV licences for the over-75s to be funded by BBC.

Disability benefits to free of tax and not means-tested.

From Sept 2017, all working parents will receive free childcare of up to 30 hours a week for three- and four-year-olds.

New youth obligation to work scheme introduced for 18 to 21-year-olds.

Employment and Support Allowance reduced for some claimants.

Working-age benefits frozen for four years.

Rents in the social housing sector to be reduced by 1% a year for four years.

Benefits cap reduced from £26,000 to £20,000 (£23,000 in London).

Families with three or more children to receive no more tax credit support.

Tax rates

Personal allowance to rise from £10,600 to £11,000 next year.

Higher rate threshold moves to £43,000 next year.

Pensions

Green paper to review pensions tax relief and taxation on income.

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