Summer Budget 2015: the key points
The announcements that make a difference to your money.
New national living wage
A new national living wage for over 25s will be introduced. From April 2016 it will be set at £7.20 an hour and rise to £9 an hour by 2020.
Income Tax allowances
The tax-free personal allowance will rise from £10,600 in 2015/16 to £11,000 from April 2016.
The threshold for those on the 40% tax rate will be raised from £42,385 to £43,000 from April 2016.
Welfare reforms
The maximum amount families can receive in benefits will be capped at £23,000 a year in London and £20,000 for the rest of the country, a cut from £26,000.
Higher income earners who live in social housing in England will lose their right to subsidised rents. From 2017/18 those living in housing association or local authority properties who earn over £30,000 a year – or £40,000 in London –will have to pay market or near-market rent.
Those aged 18 to 21 who claim Universal Credit will have to apply for an apprenticeship or traineeship, gain work-based skills, or go on a work placement six months after the start of their claim
Support from Child Tax Credits will be limited to families with two children from April 2017.
Working-age benefits, including Tax Credits and Local Housing Allowance, will be frozen for four years from 2016/17. This won’t impact Maternity Allowance, maternity pay, paternity pay and sick pay.
Inheritance Tax
From 2017 the government will introduce a ‘family home allowance’ that will raise the Inheritance Tax threshold to £500,000 for an individual and £1 million for couples.
Pensions
The amount those that earn £150,000 or more can pay into a pension tax-free will be reduced.
Free childcare
Working parents of three and four year olds will receive 30 hours of free childcare a week - up from 15 - from September 2017.
Northern transport
Cities in the North will get £30 million of funding over the next three years to improve transport.
Improvements will include an Oyster-style ticketing system for Northern England.
Tax relief for landlords
Mortgage interest relief will be cut to the basic rate of Income Tax.
From April 2016, the ‘wear and tear allowance’, which allows landlords to reduce the tax they pay (regardless of whether they replace furnishings in their property) will also be replaced by a new system that only allows them to get tax relief when they replace furnishings.
Rent a Room scheme boost
The Rent a Room allowance will be raised to £7,500 from £4,250.
Corporation Tax
Corporation Tax will be cut to 19% from 2017 and then to 18% in 2018.
Dividend tax reform
Dividend tax credit (which reduces the amount of tax paid on income from shares) will be replaced by a new £5,000 tax-free dividend allowance for all taxpayers from April 2016.
Claims management
The amount claims management companies can charge will be capped.
Public sector pay
Public sector pay rises will be capped at 1% over the next four years from April 2016.
Insurance Premium Tax
Insurance Premium Tax is going up from 6% to 9.5% from November. 2015.
MOTs
Government will consult on whether the first MOT on new cars will be required after four years, not three.
Vehicle Excise Duty
Vehicle Excise Duty is being re-introduced for all brand new cars from April 2017.
Three new bands will be created – zero, standard and premium – for those who buy new motors.
Fuel duty
There will be no change to fuel duty this year.
Student finance
Student maintenance grants will be scrapped and replaced with loans for new students from 2016/17.
Support will increase by £766 to £8,200, the highest ever provided for students from low-income households.
Student loans will only have to be paid back once students earn over £21,000 a year.
More on the Summer Budget:
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