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Introduction

This was the third Budget within the space of 12 months. It

threatened to be the most difficult of the trio because of

constraints imposed by June’s EU referendum and disappointing

economic numbers. Nevertheless, the Chancellor managed to

produce several surprises, including net tax cuts in 2017/18 and

2018/19 before reaching his often repeated goal of a budget

surplus in 2019/20.

Although the spectre of pension reforms had disappeared before

the Chancellor rose to his feet, he did announce something very

similar to a pension ISA in the form of a new Lifetime ISA for the

under-40s, starting in April 2017. Savers will also benefit from a

range of other measures, including an increase in the main ISA

limit to £20,000 in 2017/18, a reduction in the rates of capital

gains tax and an extension of entrepreneurs’ relief to external

investors in unlisted companies.

The personal allowance and higher rate

threshold for 2017/18 were given

significant increases – to £11,500 and

£45,000 respectively. Businesses will

welcome the long-awaited business

rates reform and a 17% corporation

tax rate from 2020.

BUDGET

16 MARCH 2016

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