On 8th July 2015, George Osborne, Chancellor of the Exchequer, delivered his Summer Budget 2015 to Parliament, the first budget since the General Election.
With a Conservative majority, Osborne has the opportunity to enact policies that he believes ‘puts security first’ and provides a ‘Budget for working people’.
The Budget outlined the steps that the government will take to increase wages, cut taxes, support UK businesses and achieve an estimated surplus of £10 billion by 2019-2020.
Through welfare reforms and additional fiscal measures, Osborne hopes to spur economic growth and curb benefit dependency, ultimately helping to foster more building, investing and training.
Key Numbers:
  • The Office for Budget Responsibility (OBR) forecasts that GDP will grow 2.4% in 2015, 2.3% in 2016 and 2.4% each year after until 2020.
  • The OBR forecasts employment to be 31.2 million in 2015, rising to 32.1 million by 2020.
  • The OBR forecasts that pay growth will also accelerate from 2.2% growth this year to 4.4% in 2020.

Highlights for Businesses:

  • Beginning in November 2015, Insurance Premium Tax, will jump from 6% to 9.5%. The unexpected increase has been met with resistance from insurers, who labelled it a ‘stealth tax’ and believe it will make insurance for the public more expensive.
  • Beginning in April 2016 the new National Living Wage will be £7.20 per hour for those over 25. The wage will continue to rise and reach more than £9 per hour by 2020.
  • The Employment Allowance, which gives businesses and charities a cut in the National Insurance they pay, will increase by another £1,000 to £3,000 beginning in April 2016.
  • The government will create 3 million new apprenticeships by 2020.
  • Corporation tax will be cut to 19% in 2017 and 18% in 2020—these cuts are predicted to benefit more than 1 million businesses, both large and small.
  • The government will make a continued effort to clamp down on tax avoidance and increase resources for HMRC by doing the following:
    • Allowing HMRC to access more data to better identify businesses that are not declaring or paying taxes
    • Tripling the number of criminal investigations that HMRC can undertake concerning complex tax crime
    • Allocating additional investments between 2015 and 2020 for HMRC’s work on evasion and non-compliance

The key numbers and highlights listed here are just a brief overview. For more details visit www.gov.uk/government/topical-events/budget-july-2015