March 2016 Budget
This was the third Budget within the space of 12 months and it threatened to be the most difficult of the trio because of constraints imposed by June’s EU referendum and disappointing economic numbers. Nevertheless, the Chancellor managed to produce several surprises, including net tax cuts in 2017/18 and 2018/19 before reaching his often repeated goal of a budget surplus in 2019/20.
Although the spectre of pension reforms had disappeared before the Chancellor rose to his feet, he did announce something very similar to a pension ISA in the form of a new Lifetime ISA for the under-40s, starting in April 2017. Savers will also benefit from a range of other measures, including an increase in the main ISA limit to £20,000 in 2017/18, a reduction in the rates of capital gains tax and an extension of entrepreneurs’ relief to external investors in unlisted companies.
The personal allowance and higher rate threshold for 2017/18 were given significant increases – to £11,500 and £45,000 respectively. Businesses will welcome the long-awaited business rates reform and a 17% corporation tax rate from 2020.