The summer budget, announced by the Chancellor George Osbourne, today brought a raft of changes including the financial security of lower taxes and a new National Living Wage.
The personal allowance will rise from £10,600 to £11,000 from April next year meaning people are paying £905 less than in 2010. The rise in the personal allowance will mean lower taxes for around 41, 600 people here in Wyre Forest and an estimated 885 people will be taken out of income tax altogether from April 2016.
The budget also introduced a new National Living Wage for all working people aged 25 and over. It will start next April at £7.20 an hour and is expected to reach £9 by 2020. It will mean two and a half million people get a direct pay rise. Those currently on the minimum wage will see their pay rise by over a third this Parliament. Job tax, through the Employment Allowance, will be cut even further meaning that businesses will be able to employ 4 people full time on the new National Living Wage and pay no national insurance at all. Small and medium businesses will also be pleased that the Annual Investment Allowance will be significantly and permanently raised to £200,000.
Businesses are further set to benefit with the cutting of corporation tax to 19 per cent in 2017 then 18 % in 2020. The taxation of dividends, replacing the Tax Credit with a new tax-free allowance of £5,000 of dividend income will benefit all taxpayers and dissuade against self-incorporation.
Another major point from the budget was announced as a 'long-term solution to fix Britain's poor roads' with a new system of Vehicle Excise Duty. From 2020 every penny raised in VED will invested in roads directly.
Mark Garnier MP said, "This Budget is a real step change. We are supporting people and businesses in very innovative ways meaning that those that need it most are being helped; businesses are being encouraged to grow and been given the stability needed to make forward-thinking decisions; and an awful lot of people will be taxed less and be earning more. I do appreciate that there are certain areas which people may query but the stimulus this budget creates will drive positive change across a huge number of sectors."