Budget 2016 at a glance

Economy

• Growth forecast to be 2% in 2016, down from 2.4% in November’s Autumn Statement

• GDP predicted to grow 2.2% and 2.1% in 2017 and 2018, down from 2.4% and 2.5% forecast previously

• Inflation forecast to be 0.7% for 2016, rising to 1.6% in 2017

• UK still forecast to grow faster than any other major Western economy

• A million jobs forecast to be created by 2020

Public borrowing/deficit/spending

• Further cuts of £3.5bn by 2020, with spending as a share of GDP set to fall to 36.9%

• Debt targets to be missed. Forecast debt as a share of GDP revised up in each of the next five years to 82.6% in 2016/17 and 81.3%, 79.9%, 77.2% and 74.7% in subsequent years

• Debt to be £9bn lower in 2015/16 in cash terms

• Annual borrowing in 2015/16 forecast to be £72.2bn, £1.3bn lower than forecast in November

• Public finances still projected to achieve a £10.4bn surplus in 2019/20

• Borrowing forecasts revised up to £55.5bn (+£5.6bn), £38.8bn (+£14bn) and £21.4bn (+16.8bn) in 2016/17, 2017/18 and 2018/19 respectively

• The deficit as a share of GDP is projected to fall to 2.9% in 2016/17, 1.9% in 2017/18 and 1% in 2018/19

Personal taxation

• The threshold at which people pay 40% Income Tax will rise from the current £42,385 to £45,000 in April 2017

• Tax-free personal allowance (the point at which people pay Income Tax) to rise to £11,500 in April 2017

• Capital Gains Tax to be cut from 28% to 20%, and from 18% to 10% for basic-rate taxpayers

• 0.5% rise in Insurance Premium Tax

• Class 2 National Insurance contributions abolished

Pensions and savings

• Annual Individual Savings Account (ISA) limit to rise from the current £15,240 to £20,000

• New ‘Lifetime’ ISA for the under-40s, with government putting in £1 for every £4 saved

• People will be able to save up to £4,000 a year until they turn 50

• New state-backed savings scheme for low-paid workers, worth up to £1,200 over four years

• The Money Advice Service to be abolished

Health and education

• Introduction of a new sugar tax on the soft drinks industry to be introduced in two years’ time, raising £520m a year to be spent on doubling funding for primary school sport

• Levy to be calculated on levels of sugar in sweetened drinks produced and imported, based on two bands

• Pure fruit juice and milk-based drinks to be excluded, and small supplies will be exempt

• Secondary schools in England to bid for new funding for extra after-school activities like sport and art

• Plan for all schools in England to become academies by 2022

• Compulsory maths lessons until 18 to be considered

• £500m to ensure ‘fair funding’ formula for schools in England

• Libor funds to be spent on children’s hospital services, specifically in Manchester, Sheffield, Birmingham and Southampton

Housing/infrastructure/transport/regions/energy/culture

• Powers over criminal justice to be devolved to Greater Manchester and Greater London Assembly to retain business rates

• New rail lines to get green light, including Crossrail 2 in London and the HS3 link between Manchester and Leeds

• More than £230m earmarked for road improvements in the north of England, including upgrades to M62

• £700m for flood defences schemes, including projects in York, Leeds, Calder Valley, Carlisle and across Cumbria

• Tolls on Severn River crossings between England and Wales to be halved by 2018

• £115m to tackle rough sleeping and homelessness

• In Scotland, Libor bank fines to pay for community facilities in Helensburgh and for naval personnel at Faslane

• New elected mayors for cities and towns in southern England

• New Shakespeare North theatre in Knowsley, Merseyside

Misc

• Fuel duty to be frozen at 57.95p per litre

• Beer, cider and spirits duties to be frozen

• Excise duties on tobacco to rise by 2% above inflation

Business

• Headline rate of Corporation Tax – currently 20% – to fall to 17% by 2020

• Anti-tax avoidance and evasion measures to raise £12bn by 2020

• Annual threshold for small business tax relief to be raised from £6,000 to a maximum of £15,000

• Supplementary charge for oil and gas producers to be halved from 20% to 10%

• Petroleum revenue tax to be ‘effectively abolished’

• £9bn to be raised by closing corporate tax loopholes

• Use of ‘personal service companies’ by public sector employees to reduce tax liabilities to end

• Commercial stamp duty 0% rate on purchases up to £150,000, 2% on next £100,000 and 5% top rate above £250,000. New 2% rate for high-value leases with net present value above £5m.

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