- 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