121 summarises the budget key points

This was heralded as a Budget “that puts security first, that recognises the hard work and sacrifice of the British people over the last five years”. In short, according to George Osbourne, this was a Budget for working people. We summarise the main points below:

•The Chancellor said he will make savings of £34bn over this parliament – half of which will come from government department’s budgets. Of the other £17bn, a total of £12bn will come from welfare cuts while £5bn will come from stopping tax avoidance and loopholes.
•Public sector pay rises will be capped at 1% per year until 2019 and the NHS is being offered another £8bn of spending.
•A new National Living Wage has been introduced, starting at £7.20 per hour from April 2016 to reach £9 per hour by 2020. This will be compulsory for those aged over 25. This compares with the National Minimum Wage of £6.50 for over-21s currently.
•A tax lock will be legislated for in the coming weeks to prohibit increases in the main rates of income tax, national insurance and VAT for five years.
•The 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 for the 40p rate of tax has been raised from £42,385 in this tax year to £43,000 in 2016-17, on its way to the £50,000 target.
•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. Mr Osborne says this is an advert to tell the world Britain is open for business.
•Small firms’ NI contributions will fall, with a £3,000 employment allowance. So this means that a small firm can hire four staff on the national Living Wage and pay no national insurance contributions.
•The annual investment allowance, which was initially set as a temporary tax break for businesses, will be set at £200,000 permanently from January 2016.
•£12bn of welfare savings will be found, with spending focused on the elderly and disabled and 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”, according to the Chancellor and will lose their automatic entitlement to housing benefits.
•The cap on benefits will be cut from £26,000 to £23,000 in London and £20,000 in the rest of the UK.
•Working-age benefits will be frozen for four years, including tax credits and housing benefit. Maternity payments will be excluded from the freeze.
•Working benefits will be stripped from those who are not disabled and have no children, and will be withdrawn at a faster pace as a claimant’s earnings rise.
•Tax credit and universal credit support to be limited to first two children from April 2017.
•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 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.
•An apprenticeship levy is being given to large firms, by which those firms which train apprentices receive more money than they put in to the apprentices.
•New cars will not need an MOT until they are four years old, rather than three at the moment and fuel duty has been frozen for another year.
•Britain will meet the NATO commitment to spend 2% of GDP on defence each year

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