On Wednesday 8th July 2015, George Osborne delivered the first conservative budget in 19 years. In his Summer Budget speech the chancellor declared it as a “Big Budget for a country with Big Ambitions”. As business owners and entrepreneurs, today’s announcements will impact on you and your business, key topics include: • A new National Living Wage. • Increases to the Personal Allowance and higher earners tax thresholds. • Reduction in Corporation Tax. • Changes to dividend tax. www.rajaniandco.com

1. &COG r o w y o u r s u c c e s s
RAJANI
What the Summer 2015
Budget means for you
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On Wednesday 8th July 2015, George Osborne delivered the first conservative
budget in 19 years. In his Summer Budget speech the chancellor declared it as a
“Big Budget for a country with Big Ambitions”.
As business owners and entrepreneurs, today’s announcements will impact on you
and your business - let’s take a look at the detail...
The Rajani & Co opinion
The second budget in 2015 once again reflects a
very positive outlook on the UK economy, with
potential for the UK budget to move towards an
overall surplus in the not too distant future. We
believe this is truly a budget benefiting the hard
working people of Britain looking to save!
The economy grew by 3% in 2014 and it has
been forecasted that one million extra jobs will
be created by 2020 – we believe this is fantastic
growth period in Britain and we’re proud to be
part of it.
The new government’s budget delegates more
money to be spent on innovation and science,
which is crucial for the UK economy and will
encourage boosted investment and recruitment
in multiple industries.
We’re delighted that there will be more help for
first time buyers with the ISA ‘Help to Buy’.
Compassion is shown for inheritance tax
payers, with potential increase in the IHT
banding to £1 million.
Two major reforms to follow:
The Personal Tax return is to be replaced by
a new digital tax account with much of the
information required by the HMRC uploaded
automatically. Tax payers will be able to
pay into the account at any time; it will be
interesting to see this unfold in the coming
year.
Dividend tax credit is being replaced with a
£5,000 tax-free allowance for all taxpayers
from April 2016. The new system will ensure
only those with significant dividend income
will pay more tax – as what level of income is
considered ‘significant’ was not revealed in
the speech. Again something to note for small,
family-owned limited companies that pay their
director/shareholders a combination of salary
and dividends to optimise tax efficiencies.
But what does this mean for you?
We have created a budget breakdown so you
can understand how the summer 2015 budget
will affect you, your family & your business.
We’re here to help you navigate through the
financial jargon and provide you with an
insight to the key announcements from the
budget.
Personal tax & pay
New National Living Wage
From April 2016, a new National Living Wage
will be introduced, rising to £7.20 an hour
for employees aged over 25. This wage will
increase to £9 an hour by 2020.
Personal Allowance
In 2016-17, tax free Personal Allowance – the
amount people earn before having to pay
Income Tax on any earnings –
will increase to £11,000. This
will rise to £12,500 in 2020.
The predicted impact of
the increase is the typical
taxpayer will be £905 a year
better off in 2016-17.

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A new law will be introduced to ensure people
working a minimum of 30 hours a week on
National Minimum Wage aren’t required to pay
income tax.
Income Tax
For people earning within the higher rate
threshold, the amount they will have to earn
before paying tax at 40% will increase from
£42,385 in 2015-16 to £43,000 in 2016-17.
Inheritance Tax
The family home will no longer be included
in Inheritance Tax from April 2017. Currently
only married couples and civil partners can
exchange unused allowance to one another, but
following the change individuals will be offered
family home allowances so they can pass on
homes to children or grandchildren tax-free
after their death.
The family home allowance will be added to the
threshold, meaning the total tax-free allowance
will be up to £1 million in 2020-21.
Pension
From April, the amount people with an income
of more than £150,000 can pay tax free into a
pension will be reduced.
Non-dom status
Non-domiciled individuals are people who live
in the UK but consider their permanent home
elsewhere, and they currently only pay tax on
income they bring into the UK.
From April 2017, non-dom status will be
abolished and anyone who has been a resident
of the UK for 15 of the past 20 years will be
taxed.
Business
Dividend tax credit will be replaced with a
new tax free allowance of £5,000 on dividend
income. Rates of dividend tax will be set at
7.5%, 32.5% and 38.1%.
Investors with an income from shares will
experience either a tax cut or no change in the
amount that they owe.
Corporation tax
The main rate of Corporation Tax will continue
to fall over the next 5 years from 20% to 19% in
2017, and then again to 18% in 2020. This will
benefit millions of businesses nationwide.
Employment Allowance
The National Insurance bill for businesses will
be cut by another £1,000 from April 2016, as the
Employment Allowance increases to £3,000; this
will gives businesses and charities a cut in the
employer National Insurance they pay.
The government calculates this change will
enable businesses to employ up to 4 full time
members of staff on the National Living Wage
and pay no National Insurance.
Annual investment allowance
The annual investment allowance will be set at
its ever permanent level in 2016 at £200,000.
This means businesses will be able to deduct
the value of certain items, including equipment
and machinery, from their profits from tax. The
full tax relief will be given to businesses in the
year of purchase which will help cash flow.
Apprenticeships
By 2020, 3 million new apprenticeships will be
created and companies who commit to training
will receive more than they put in.
Welfare
Changes to the welfare system
include:
• Working-age benefits,
including tax credits and
Local Housing Allowance,
will be frozen for 4 years
from 2016-17.
• The annual household

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benefit cap will be reduced to £20,000
(£23,000 in London).
• Child Tax Credit will be restricted to two
children, affecting those born after April
2017.
• Working families with 3 and 4 year olds
will receive 30 hours of free childcare – an
increase from the current 15 hours.
Education
Student grants are set to be replaced by new
maintenance loans from the 2016-17 academic
year. Financial support for new students will
increase to £8,200 a year, the highest level for
students low-income households.
Repayment of loans will only begin when
graduates earn above £21,000.
State of UK economy
The budget highlighted how the national
deficit will be reduced by around 1% of GDP
on average each year. This is the same pace as
the previous 5 years, which means a surplus –
where more tax is raised than is spent – will be
achieved in 2019-20.
Tax avoidance
Following the toughened sanctions in the
previous budget, the government will continue
to clamp down on tax avoidance. The budget
signals £7.2 billion will be raised from sanctions
on evasion.
HMRC crackdowns include:
• Tripling the number of criminal
investigations HMRC can undertake into
complex tax crime, concentrating on
wealthy individuals and companies.
• Allowing HMRC to access more data to
identify businesses that aren’t declaring or
paying tax
• Preventing investment fund managers from
using tax loopholes to avoid paying the
correct amount of Capital Gains Tax on their
profits from the fund.
• Making sure international companies pay
tax on profits diverted from the UK.
• Publishing the names of people who
repeatedly use failed tax avoidance schemes
Defence
The Ministry of Defence’s budget will rise above
inflation by 0.5% each year up until 2021,
and an additional £1.5 billion a year will be
made available to the military and intelligence
agencies.
2% of national income will be spent on defence
every year.
Further investment in science and
innovation
Future economic success depends on future
science success. The government is investing
£140 million in world class research on the
infrastructure and cities of the future, and
£40 million in research into what is known as
the Internet of Things. This is the next stage
of the information revolution, connecting up
everything from urban transport to medical
devices to household appliances.
The government is also launching a new UK
research initiative into the future potential of
digital currency technology, supported by a £10
million increase in funding in this area.
Need advice?
If you have any questions about the Summer
Budget Summary or are interested in our
services, please call 01933 276 327 today or
alternatively fill in our contact form on our
website: www.rajaniandco.com.