George Osborne’s first budget for a fully Conservative government announced the introduction of the new national living wage along with a £12billion cut in the welfare spending. The theme was clear that individuals’ wealth should be coming from employment and not benefits.
Time will tell whether the boost given to business of the reduced 18% corporation tax rate will be sufficient to pay for this but other significant changes to the tax system included within the fine print which may be of interest to our clients include:
- Changes to the tax treatment of dividends which will require most owner managed companies to review their dividend policy.
- The new minimum living wage will add additional salary costs for many small businesses already burdened by auto-enrolment pensions.
- The NIC employment allowance of £2,000 will rise to £3,000 from April 2016, but will not be available for single director/employee companies.
- Restriction of interest relief to basic rate only on rental property along with the removal of wear and tear allowance which will impact heavily on buy-to-let landlords.
- The expected increase to the inheritance tax threshold for the family home.
- Changes to the to the non-dom rules to strip long term UK residents of their non-dom status.