Budget 2016: Here's How It Affects You

16 March 2016, 14:14

George Osborne budget

Chancellor George Osborne has delivered his annual budget. This is what you need to know.

Sugar Tax

Osborne announced a tax on companies making sugary drinks, which will come into play in the next two years, with exemptions for milkshakes and pure fruit juices. The Sugar levy is forecast to raise 520 million pounds which is due to be used for sports eduction in schools.

Schools

All state schools will become academies by 2022, receiving funding directly from central government rather than local authorities. LBC have made a great explainer on exactly what this change will mean.

Savers

Savers will be able to put £20,000 into ISA accounts tax free, after Osborne lifted the threshold. He also announced a special lifetime ISA for people under 40, which will mean that for every 4 pounds a saver puts in the government will add another.

Higher Tax Threshold

The threshold for paying the higher rate 40% tax will be raised to £45,000 by April 2017 meaning anyone being paid up to the figure will remain in the lower tax bracket.

Lower Tax Threshold

The lower tax threshold will be raised from April 2017 to £11,500, meaning that earnings up to the figure will not be taxed at all.

Small Businesses

Osborne has changed business rates which will mean 6,000 small businesses will be completely exempt and 250,000 will have their rates cuts from April 2017.

VAT Loophole

A VAT loophole will be closed that allows online businesses to sell goods in the UK without paying the tax, which aims to make small businesses in Britain more competitive.

Corporation Tax

Alongside a cut in corporation tax he announced the closing of a number of loopholes that allow multinational to reduce the amount of tax paid in the UK.

Flood Defences

After a series of catastrophic floods in the North of England an extra £700 million will be spent on flood defences funded by an increase in tax on insurance premiums.

Brexit

The chancellor warned that should Britain vote to leave the EU this would cause "negative implications" and cause "disruptive uncertainty.”

Infrastructure

A number of infrastructure project where announced, primarily for the north of England. A new tunnel is planned between Sheffield and Manchester, along with HS3, a train line between Manchester and Leeds.

Homelessness

An additional £150 million pounds in support for homelessness in a new package to tackle the issue.

Devolution 

Alongside Osborne's longstanding aim to devolve powers to northern cities he has also announced new devolved authorities for the East Anglia and the West of England.

Alcohol

Duty on beer, cider and whisky has been frozen for another year.   

Fuel Duty 

Fuel duty on petrol and diesel will be frozen for 2016/2017, which will save teh average driver £75 pounds per year. 

 

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