The chancellor George Osborne has made his Summer Budget report. Smoke and mirrors? Certainly not a budget for smaller businesses. Highlights include a raid on small business owners by amending dividend tax. This page is subject to updating as more of the small print emerges.

 Soundbites: Security first...a budget for working people...not all our problems are solved...Britain still spends too much and borrows too much...global growth is down...Britain is still working to pay off its borrowing. 

Measures effective from 8 July 2015

  • CFCs loss restriction
  • CGT on carried interest
  • Restriction of CT relief for amortisation of goodwill
  • Disposal of stock and corporate intangibles
  • Simplification of debtor/creditor interest rates
  • Restriction of loss relief on bank compensation payments

Income tax and allowances

From 2016/17

  • Income tax rates remain unchanged
  • Personal allowance rises to £11,000 and then rises inline with the NMW 
  • Higher rate threshold raises to £43,000 

National Insurance and Employment

From 2016/17

  • The Employers' NICs allowance increases to £3,000
  • The Employers' NICs allowance is restricted for sole director companies. 
  • New rebranding of the NMW: National Living wage of £7.20 per hour.

Income tax on dividends 

From 2016/17:

  • Reforms to simplify (sic) tax of dividends
  • A £5,000 dividend allowance
  • Three dividend tax bands: 7.5%, 32.5% and 38.1%
  • Dividends received by pensions and ISAs will be unaffected
  • See Summer Budget 2015: Dividends

Property taxes

From 2016/17

  • Buy-to-let landlords will no longer be able to receive higher rate relief on mortgage interest 
  • Rent-a-room relief to be raised to £7,500 
  • The wear and tear allowance will be reformed 
  • See Summer Budget 2015: Property Taxes

Farmers

Personal service companies and employment intermediaries

From 2016/17

Investment managers

The Chancellor is proposing a few tweaks to highly favourable tax regime that is available to investment managers.

  • Changes to the definition of a carried interest apply from 8 July 2015
  • A new consultation proposes that performance linked rewards paid to an individual performing investment management services are charged to tax as income.
  • See Summer Budget 2015 Investment Managers' Taxation

Savings and investments

  • A new consultation on including crowdfunding as an ISA investment.
  • A new savings band from 2016/17 of £1,000 for basic rate taxpayers and £500 for higher rate payers.

Inheritance Tax (IHT)

From 2017/18

  • An additional nil-rate band when a residence is passed on death to a direct descendant. 
  • Anti-avoidance measures to prevent non-UK-domiciled individuals obtaining IHT relief on UK situs asset held through offshore structures.
  • See Summer Budget 2015: IHT changes

Capital allowances

From 1 Jan 2016

Pensions

From 2016/17

  • Restriction on contributions: £10,000 annual allowance for upper rate taxpayers (earning more than £150k per year)
  • Aligning Pension Input Periods with tax years
  • A new consultation on pension reform
  • See Summer Budget 2015: Pensions

Non-domiciled tax status

From 2017/18

  • No preferential IHT treatment for UK situs assets
  • UK born individuals will not be allowed to change to non-domiciled
  • Permanant non-dom status is abolished: if you live in UK for 15 out of 20 years
  • See Summer Budget Non-domiciled taxpayers

Corporation tax

  • Corporation tax rates drop to 19% in 2017 and to 18% by 2020
  • There will be no tax relief for companies who write off the cost of purchased goodwill and certain customer related intangible assets. Apples to all acquisitions made on or after 8 July 2015.
  • Tax payment on account dates advance for big companies
  • Apprenticeship levy on big employers
  • Anti-avoidance measures apply to transfers of trading stock or intangible fixed assets between related parties: the transfer pricing rules will not be ablo to counter market value.
  • See Summer Budget 2015 Company Tax

R & D relief

  • A restriction from 1 August 2015 to prevent universities and charities from claiming R & D expenditure credit on their own research or when working as a contractor.
  • See R & D relief

Compliance

Anti-avoidance

Public sector pay

  • Public sector pay will increase by 1% a year for 4 years from 2016-17

Banks

  • Bank levy to be reduced
  • 8% surcharge on bank profits from 1 January 2016

Insurance

  • Regulation on claims compaines
  • IPT raised to 9.5% from 1 November 2015

Vehicle excise duty

  • 3 new bands to create a new roads fund

Students

  • Student maintenance grants to be replaced with loans from 2016-17, to be paid back once people earn more than £21,000 a year
  • The maintenance loan will increase to £8,200

Welfare and Tax Credits

  • A whole package of changes affecting tax credits, social rents and benefits claims.
  • The Child Tax Credit restricted for couples who have more than 3 children after 2017.
  • From September 2017, working families with 3 and 4 year olds will receive 30 hours of free childcare.
  • Working-age benefits, including tax credits and Local Housing Allowance, will be frozen for 4 years from 2016-17 (this doesn’t include Maternity Allowance, maternity pay, paternity pay and sick pay)
  • the household benefit cap will be reduced to £20,000 (£23,000 in London)
  • support through Child Tax Credit will be limited to 2 children for children born from April 2017
  • those aged 18 to 21 who are on Universal Credit will have to apply for an apprenticeship or traineeship, gain work-based skills, or go on a work placement 6 months after the start of their claim
  • rents for social housing will be reduced by 1% a year for 4 years, and tenants on higher incomes (over £40,000 in London and over £30,000 outside London) will be required to pay market rate, or near market rate, rents