Pay

• A new National Living Wage to reach £9 per hour by 2020, compulsory for those over 25.

• It will start at £7.20 next April, and be set then on by the Low Wage Commission, in line with the £9 target. That compares with the National Minimum Wage of £6.50 for over-21s currently.

Income tax

• A tax lock to prohibit increases in main rates of income tax, national insurance or VAT for five years will be legislated for in coming weeks

• Tax-free personal allowance will be raised from £10,600 to £11,000 next year, as a step towards a target of £12,500.

• The threshold will also rise in line with the minimum wage.

• Threshold for 40p rate raised from £42,385 in this tax year to £43,000 in 2016-17, on its way to the £50,000 target.

Corporation tax

• Corporation tax will be cut to 19% in 2017, and then 18% from 2020. That is down from 28% when he took over as Chancellor in 2010.

• Small firms’ NI contributions will fall, with a £3,000 employment allowance. So a small firm can hire four staff on the national Living Wage and pay no national insurance.

• The annual investment allowance, which was a temporary tax break for firms, will be set at £200,000 permanently from January 2016.

• Dividend tax credit will be replaced by a new £5,000 tax-free dividend allowance.

• But dividend tax rates are going up from zero to 7.5% for basic rate income tax payers, from 25% to 32.5% for higher rate taxpayers, and from 30.56% to 38.1% for additional rate payers.

Benefits

• £12bn of welfare savings will be found, with spending focused on the elderly and disabled, the Chancellor said.

• Disability benefit will not be taxed or means tested, while more money is going to women’s refuge centres.

• For those aged 18-21, they must “earn or learn”, Mr Osborne says, and will lose their automatic entitlement to housing benefits.

• From 2017, all working parents of three- and four-year old’s must work if they want universal benefit, but also get 30 hours of free childcare each week, up from 15 hours.

Child benefit

• Tax credit and universal credit support to be limited to first two children from April 2017.

• Housing benefit will also be affected by removing family premium for new children from April 2016.

• But multiple births like triplets will be excluded from the limit.

Housing

• Buy to let landlords will get less tax relief on their mortgage interest payments, Mr Osborne said.

• Home owners with lodgers will be able to earn £7,500 tax-free from their house-guests each year.

• From 2017 there will be an extra £175,000 inheritance tax allowance for those who leave their homes to their children or grandchildren, on top of the £325,000 standard inheritance tax allowance currently. The relief is tapered away for those with estates of more than £2m.

• The threshold and new allowance are both twice as high for married couples and civil partners, meaning they will now be able to inherit up to £1m tax-free from each other.

Pensions

• Those earning more than £150,000 will have their tax-free contributions allowance tapered away from its current £40,000 per year to a minimum of £10,000.

• The Government is consulting on a new ISA-style pension where savers pay tax on the income they put in, but not when they take it out.

 

Cars

• New cars will not need an MOT until they are four years old, rather than three at the moment.

• Fuel duty has been frozen for another year.

• But insurance premium tax is being hiked from 6% to 9.5%.

• Vehicle Excise Duty is also being reformed. New cars will pay a variable rate, but beyond the first year, drivers will pay £140 in tax on most cars. Drivers are exempt if the car has zero carbon emissions.

• One exception is for expensive cars – if the vehicle costs more than £40,000 and incurs the £140 charge, the driver will pay an additional £310 annual surcharge.

Productivity and skills

• Mr Osborne says “too many large companies leave the training to others and take a free ride on the system”.

• He is introducing an apprenticeship levy on large firms, by which those firms which train apprentices receive more money than they put in .

• The Chancellor praises tuition fee reforms as “a triumph of progressive reform” to get more students from poor backgrounds into university, and is now removing the cap on student number.

• Mr Osborne says from 2016-17, maintenance grants will be replaced by loans for studentsto be paid back when they earn more than £21,000. Loans of up to £8,200 will be available.

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