Summer Budget 2015: the small print
What wasn't mentioned in the Chancellor's speech.
As ever with Budgets, there were some announcements, or further details, that weren't mentioned in the Chancellor's speech. Here are some things that only appeared in the Budget book.
Tax-free childcare scheme
The new tax-free scheme will be introduced in early 2017, following a Supreme Court judgment that the Government’s proposals are lawful.
This scheme will offer up to £2,000 of childcare support per year per child.
The current employer-supported childcare voucher scheme is still open to new parents who want to sign up and the Government says it will remain so until the tax-free scheme launches.
Insurance costs
There was mention of how the Financial Conduct Authority will review what more can be done to persuade people to shop around when they renew their car insurance policy.
Pension wise guidance to be extended
The Government’s new Pension wise guidance service, which aims to offer free guidance on pensions, is to be extended to people aged 50 and over. This is perhaps due to the fact the service is reportedly under-used by the over-55s since it launched earlier in the year.
Sale of annuities
While the Government wants to press ahead with a marketplace for pensioners to sell annuities, it is delaying the launch of it until 2017 to ensure there is enough information for people to make an informed decision. This decision has almost certainly been taken following criticism that the recent pension reforms were rushed through.
Tobacco levy
After a consultation into introducing a tobacco levy on manufacturers and importers, which would in turn be passed onto smokers through higher prices, it’s been decided to not introduce it. Tobacco duty will continue to rise by more than inflation each year though.
Cider duty
The current duty exemption on cider will continue until a replacement scheme is set up.
Energy bills
The Government wants to introduce 24-hour switching into the energy market – but not until 2018.
Innovative Finance ISA
The long-awaited ISA for peer-to-peer investors will launch on 6th April next year. There is a consultation on whether crowdfunding investments should be included too.
Help to Buy: ISA
The Budget book says that the new Help to Buy: ISA, where the Government will offer a bonus of £3,000 on the first £12,000 of savings, will be available from 1st December. However, wannabe property owners can deposit an initial lump sum of £1,000 now.
You can read more on this ISA in Everything you need to know about the Help to Buy: ISA.
Tax crime
As the Government will be tripling its resources, it wants HMRC to be bringing 100 prosecutions a year for “complex tax crimes” by the end of this Parliament in 2020.
Wear and tear allowance for landlords
Currently landlords can claim up to 10% of the ‘relevant rental amount’ for furnished lettings back in the form of a wear and tear allowance.
This is being replaced from April 2016 by a relief that will allow landlords to only claim for the costs of actual items bought to replace worn ones. This doesn’t apply to holiday lets.
Spending Review to come
There will be a Spending Review in the autumn which will set out the detail of £20 billion of further ‘consolidation measures’ needed to achieve a surplus.
These will include more tax avoidance and evasion measures and will “continue to consider sensible welfare reform”.
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More on the Summer Budget:
Summer Budget 2015: the key points
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