As the Government’s austerity measures come under increasing scrutiny we take a look at what last week’s Budget means for you.
Beyond the noise thrown up by the ‘Sugar Tax’ and Iain Duncan Smith’s resignation, there is still the matter of the actual Budget itself.
Chancellor George Osborne announced plans to cut the main rate of corporation tax to 17% by 2020. This is a huge drop from the rate of 28% that was in place when the Conservatives came into power. Osborne also declared that he would “more than double” the small business rate relief from April 2017. This means that over 600,000 small businesses will not have to pay business rates at all.
The Chancellor claimed that this was “a budget for working people”, as he announced that the tax threshold will rise to £11,500 in April 2017. This keeps the Government on track to meet the £12,500 threshold that it promised before the election.
The threshold for employees paying the 40% tax rate will also increase to £45,000. Meanwhile, self-employed people will not need to pay Class 2 National Insurance contributions from 2018.
Osborne also announced that a consultation on extending Shared Parental Leave (SPL) to grandparents will launch in May. One purpose of the consultations will be to simplify the eligibility requirements and notification system for SPL as a whole.
Besides the Budget, Prime Minister David Cameron last week announced further increases to the National Minimum Wage. The increases are above the rate of inflation and will come into effect in October of this year.
From October the National Minimum Wage will be:
- Apprentices: £3.40 per hour
- 16-17 year olds: £4.00 per hour
- 18-20 year olds: £5.55 per hour
- 21-24 year olds: £6.95 per hour
These increases are in addition to the widely reported National Minimum Wage and National Living Wage rate increases which come into effect from 1st April.