Budget 2015 #2: Key points

Below we’ve summarised the key Budget 2015 pledges, which might affect wholesalers and their businesses.

Was it a positive or negative Budget? We’ll let you, and the passage of time, decide that one.

  • UK grew 2.6% in 2014, faster than any other advanced economy but lower than 3% predicted in December
  • 2.5% growth forecast in 2015, up from 2.4% predicted in December, followed by 2.3%, 2.3%, 2.3% and 2.4% in the next four years
  • Record employment in the UK, with jobless rate to fall to 5.3% this year
  • Trade deficit figures “the best for 15 years”
  • Living standards “higher” than in May 2010, according to OBR data, with households better off by an average of £900 in last five years
  • Inflation projected to fall to 0.2% in 2015
  • Beer duty cut by 1p a pint and cider by 2p. 2% cut in excise duty on scotch whisky and other spirits while wine duty frozen
  • No changes to tobacco taxes, with tobacco duties set to rise by 2% above inflation, equivalent to 16p on a packet of 20 cigarettes.
  • Petrol duty frozen – September’s planned increase cancelled
    • The tax-free personal allowance to rise from £10,600 in 2015-6 to £10,800 in 2016-7 and £11,000 in 2017-8
    • The threshold at which people start paying 40p income tax to rise by above inflation from £42,385 in 2014-5 to £43,300 in 2017-8
    • Annual paper tax returns to be abolished
    • Transferable tax allowance for married couples to rise to £1,100
    • Class two national insurance contributions for self-employed to be abolished in next Parliament (May 2015 onward)
    • Review of inheritance tax avoidance through “deeds of variation”
    • New personal savings allowance – first £1,000 interest on savings income to be tax-free for basic rate taxpayers and £500 allowance for 40p tax ratepayers.
    • Annual savings limit for ISAs increased to £15,240
    • “Fully flexible” ISA will allow savers to withdraw money and put it back later in the year without losing any of their tax-free allowance
    • Tax on “diverted profits” to come into effect next month, aimed at multinational firms moving profits “artificially offshore”
    • Annual bank levy to rise to 0.21%, raising an extra £900m. Banks to be barred from deducting compensation for mis-selling from corporation tax
    • Review of business rates (no date given)
    • Automatic gift aid limit for charities to be extended to £8,000
    • Farmers allowed to average incomes for tax purposes over five years
    • Up to £600m to clear new spectrum bands for auction to improve mobile networks: commitment to deliver ultra-fast broadband to all homes
    • New powers for Mayor of London over skills and planning
    • Greater Manchester councils to be allowed to keep 100% of growth in business rates
    • New inter-city rail franchise for south west of England
    • Toll for Severn river crossings to be reduced from 2018
    • Consultation on £1bn “tidal lagoon” in Swansea Bay to generate green energy

In our next post we’ll bring you some comment from supplier and other partners:

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