A tax lock will be introduced.
The government has announced that they will legislate to ensure that they do not raise the main rates of Income Tax, VAT and Employee NIC, and that they do not remove any items from the zero or reduced rate VAT.
They will introduce a National Living Wage
For workers aged 25 and above there will be a National Living Wage of £7.20 per hour from April 2016.
There are changes to the Employment Allowance
The Employment Allowance reduces the amount of Employer’s NIC payable in respect of employees. Currently, the employer can reduce the NIC paid by £2,000 per annum, and this will increase to £3,000 from April 2016. From the same date, however, it will not be available to companies where thedirector is the sole employee.
There are changes to tax credits
There are a number of changes, the main ones being:
- From April 2016 the income level above which tax credits and universal credits are reduced will fall. At the same time, the rate at which they are withdrawn will increase.
- The child element will not apply to a third and subsequent child born after April 2017.
- Those starting a family after April 2017 will not be eligible for the family element of tax credits, or equivalent in universal credit.