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What’s in the 2015 budget…

Everyone is talking about today’s budget but what does it really mean for those of us living and working in the South West? We’ve been through the report and pulled out some of the headlines that we think you need to know about… in short, here is our guide to what’s in the budget…

For the UK…

  • The UK economy grew 2.6% in 2014, faster than any other advanced economy but lower than the 3% predicted in December
  • There is record employment in the UK, with jobless rate to fall to 5.3% this year
  • Trade deficit figures are “the best for 15 years”
  • Inflation projected to fall to 0.2% in 2015, according to the OBR

For individuals…

  • Personal tax-free allowance will be increased to £10,800 in April 2016, and to £11,000 in April 2017
  • Pension pot lifetime allowance to be reduced from £1.25m to £1m from next year
  • There will be a review on the use of deeds of variation to avoid inheritance tax. This will report by the autumn, so we’ll report more on the implications then
  • The threshold at which people start paying 40p tax will rise by above inflation from £42,385 to £43,300

For employers and businesses…

  • The National Minimum Wages will rise by 20p an hour to £6.70 from October.  The hourly rate for younger workers will also rise, and for apprentices it will go up by 20% – or 57p – to £3.30 an hour
  • Corporation tax will be cut to 20% in two weeks’ time
  • Employers’ National Insurance contributions for under-21s to be abolished from this April, and for young apprentices from April 2016
  • Class 2 National Insurance contributions for the self-employed to be abolished entirely in the next parliament
  • There will be “more generous” tax credits for TV and film, expanded support for video games industry and new tax credit for orchestras, and a consultation on tax support for local newspapers
  • The South West is to receive £7bn in transport rail investment
  • Farmers will be allowed to average incomes for tax purposes over five years
  • The will be a consultation on tax relief for local newspapers
  • The toll for Severn river crossings will be reduced from 2018 and eventually scrapped

For those that work for themselves…

  • The annual tax return to be abolished altogether for the self-employed
  • Up to £600m will be spent to clear new spectrum bands for further auctions, improving mobile phone coverage nationwide, including in remote communities
  • There will be increased funding for wifi in public libraries and new national plan for ultra-fast broadband to nearly all homes in the country

For those buying a home…

  • A new Isa will be available for first-time buyers. For every £200 a first-time buyer saves, the government will top up with another £50. It means that if you put in £12,000, the government will put in £3,000 more

The Guardian has published a very helpful guide to budget buzzwords and a glossary of terms here.

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