In his speech to the House of Commons today, the Chancellor of the Exchequer George Osborne announced a raft of measures affecting NAFD member businesses.
In brief these include:
- Corporation tax will be cut to 19% in 2017, and then 18% from 2020. Down from 28% in 2010.
- Small firms’ NI contributions will fall, with a £3,000 employment allowance.
- The dividend tax credit will be replaced by a new £5,000 tax-free dividend allowance for all taxpayers from April 2016. Tax rates on dividend income will be increased.
- A new National Living Wage to reach £9 per hour by 2020, compulsory for those over 25. Starting at £7.20 next April and then set by the Low Wage Commission in line with the £9 target.
- Fuel duty has been frozen for another year.
- New cars and motorbikes will not need MOTs for the first four years, rather than three.
- A new apprenticeship levy on large firms, where those firms which train apprentices receive more money than they put in.
- The government will consult on devolving powers on Sunday trading to city mayors and Local Authorities.
- The government will conduct a review into the size and provision of crematoria facilities, alongside a review into cremation legislation and coroner services.
The Chancellor also announced a raft of changes and cuts to welfare spending in order to save £19bn by 2020. Over the coming weeks, the NAFD will be working with Ministers, civil servants and parliamentarians across the UK to ensure these changes do not negatively affect the Social Fund Funeral Payment. Indeed, we will continue our campaign to link the payment to inflation as a first step to fairness.
In terms of personal tax, the Chancellor announced that legislation to create a ‘tax lock’ which prohibits increases in main rates of income tax, national insurance or VAT for five years will be presented in the coming weeks.
The tax-free personal allowance will be raised from £10,600 to £11,000 next year, as a step towards a target of £12,500, and the threshold for 40p rate will be raised from £42,385 in this tax year to £43,000 in 2016-17, on its way to the £50,000 target. He also announced that the pensions tax annual allowance is to be tapered away to a minimum of £10,000 from next year.
At the start of the speech, the Chancellor unveiled a slightly downgraded growth forecast for the UK this year, of 2.4%, and pushed back the date at which public finances would move into surplus to 2019-20.
A more in depth assessment of the Budget for the funeral service sector will appear in August’s Funeral Director Monthly.