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Spring Budget 2016

Our Summary is designed to cover the key tax changes announced in the Chancellor’s speech and includes tables of the main rates and allowances. Alongside our text we have included tips which you may want to consider. At the back of the Summary you will find a calendar of the tax year with important deadline dates shown. 

We recommend that you review your financial plans regularly as some aspects of the Budget will not be implemented until later dates. We will, of course, be happy to discuss with you any of the points covered in this report, and help you adapt and reassess your plans in the light of any legislative changes.

Significant points

  • Tax-free Personal Allowance will be increased to £11,500 with effect from 6 April 2017.
  • Individuals will be able to earn up to £1,000 from trading, and a further £1,000
    from letting property, before they need to declare the income or pay tax.
  • SDLT due on the purchase of commercial property is reformed, with new
    bands and rates effective from 17 March 2016.
  • Entrepreneurs’ Relief reinstated for gains made on business goodwill
    transferred on incorporation to a close company.In some circumstances this
    change is backdated to 3 December 2014.
  • Capital Gain Tax rates reduced to 20% for higher rate taxpayers and 10%
    for basic rate taxpayers from 6 April 2016, but no change for CGT due on
    disposals of residential property or receipts of ‘carried interest’.
  • Corporation Tax charged on directors’ loans increased from 25% to 32.5%,
    where the loan is still outstanding nine months after the company‘s year end.
  • Business rates relief for small businesses expanded and made permanent.

Please click on the link below to view our full summary:

Ad Valorem – 2016 Spring Budget Summary

Dividend Changes 

One change which is happening from 6 April 2016 which was not covered in this Budget is the change to the way dividends are taxed.  For most taxpayers, dividends will be subject to an extra 7.5% of tax.

It is worth directors of companies to consider whether they should declare additional dividends before 5th April 2016 to take advantage of the existing lower tax rules. This is particularly relevant to those shareholders whose income for 2015/16 is likely to be below the higher rate tax threshold of £42,385 or where the company has sizeable reserves.

If this is the case for you, please contact either our Head of Corporate Services, Simon Mason (, or our Head of Tax, Delyth Barnett (, to discuss the possible options.

Ad Valorem Accountancy Services

01908 219100

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