Clamping down on tax abuse by corporations and non-doms, changing dividends tax and reducing tax breaks for buy-to-let landlords, cutting corporation tax and investing in transport infrastructure, were the focus for the Chancellor, George Osborne, in the first Conservative Budget for nearly 20 years
In a 70-minute speech, the Chancellor set out a radical Budget with a cut in corporation tax and the introduction of a living wage, reform of the tax credits system and an overhaul of inheritance tax.
In an unexpected move buy-to-let landlords will have high rate tax relief removed from 2017, effectively reducing tax relief rate to 25% and the annual investment allowance will be set at a permanent £200,000.
There will also be reforms of dividend taxation to clamp down on abuse of the system, particularly in light of reductions in corporation tax rates. From 2017, the dividend allowance will be set at £5,000, while those with dividend portfolios of £140,000 will be most affected.
The tax-free allowance will be £11,000 from 2016; higher rate threshold will rise to £43,000 from 2017-18, with commitment to raise the threshold to £50,000 by 2020.
