Budget 2016 - Key Points

The economy

• The economy is expected to grow by 2.2pc this year, down from a previous forecast of 2.4pc.
• Growth has been revised down for every year thereafter, with GDP expected to rise by 2pc in 2016, then by 2.2pc in 2017, and by 2.1pc in each year from 2018 to 2020.
• The OBR has downgraded potential UK productivity growth, this revision is a "highly uncertain judgement call"
• When Mr Osborne assumed his position, the Government "borrowed £1 in every £4 we spent, next year it will be £1 in every £14".

The European Union

• OBR says that a vote to leave the EU "could have negative implications for activity via business and consumer confidence, and might result in greater volatility in asset and financial markets".
• There appears to be consensus that a vote for Brexit would result in "disruptive uncertainty", the OBR says.

Borrowing

• In cash terms the national debt is lower, but so too is the nominal size of our economy.
• Debt as a percentage of GDP is accordingly above target, but the level of national debt is in cash terms £9bn lower than predicted.
• The deficit - government borrowing - is forecast to fall to 2.9pc of GDP in the next financial year, dropping to 1.9pc in 2017-18, and to 1pc in 2018-19.

Personal taxes

• Fuel duty will be frozen for a sixth year in a row. 
• The tax free personal allowance will increase to £11,500 next year, in excess of the £11,000 planned. The higher 40pc rate threshold will increase to £45,000.

Capital Gains Tax

• The Chancellor said Capital Gains Tax would be cut from 28 per cent to 20 per cent, with the rate paid by basic rate taxpayers down from 18 per cent to 10 per cent.
• The new rates will come into effect in three weeks' time The old rates will be kept in place for gains on residential property and carried interest.
• A new 10 per cent rate will be applied to long-term investments in unlisted companies. 

 Business taxes

• Corporation tax will be cut to 17pc by 2020, from 20pc now.
• Capital gains tax slashed from 28pc to 20pc for top rate taxpayers, and from 18pc to 10pc for basic rate taxpayers.
• New threshold for small business rate relief will increase from £6,000 to £15,000, and higher rate will be increased also.
• Business rates will also be linked to CPI, the official measure of inflation which has historically been lower than the RPI rate rates are currently linked to.
• Tax on North Sea oil is being cut, and will be backdated, effective from the start of the year.
• The Chancellor will introduce a sugar levy on the soft drinks industry, assessed by volume and introduced in two years' time. The proceeds will fund school sports.

Savings

• The ISA limit will be raised to £20,000 from around £15,000.
• New Lifetime ISAs for those under 40, offering £1 from the government each year for every £4 saved.

Infrastructure

• £700m will be spent on flood defences, paid for by a 0.5pp insurance premium tax increase.
• The Government is committing to building Crossrail 2.

Education

• Extra funding to mean that every primary and secondary school will be in the process of becoming an academy by 2020.
• Government will look at teaching maths to 18 for all pupils.

And the rest

• £100m from Libor fines will be given to air ambulances.
• There will be a new tax break for museum and galleries which take their exhibitions on tour.