Business

Budget 2016 at a glance

George Osborne delivers his Budget earlier today 

NORTHERN Ireland is set to benefit from around £200 million under the Barnett consequentials as a result of Chancellor George Osborne's eight Budget presented in Westminster.

And his UK-wide move to cut the rate of corporation tax from its current level of 20 per cent to 17 per cent by 2020 will also benefit the north.

Stormont is due to introduce its own rate of 12.5 per cent in April 2018, and the reduction in the UK headline rate will mean it will cost possible tens of millions of pounds less to the Northern Ireland coffers.

In other Northern Ireland-specific measures mentioned by Mr Osborne, there will be extended capital allowances for the Coleraine enterprise zone, while Libor fines will help set up the first air ambulance service in the region.

Elsewhere, a new sugar tax on the soft drinks industry to be introduced in two years' time, raising £520 million a year to be spent on doubling funding for primary school sport.

The Chancellor said the levy will be calculated on levels of sugar in sweetened drinks produced and imported, based on two bands, but pure fruit juice and milk-based drinks will be excluded and small supplies will be exempt.

On personal taxation, the threshold at which people pay 40 per cent income tax will rise from £42,385 now to £45,000 from April next year, and being introduced at the same time, people's tax-free personal allowance - that's the point at which people pay income tax - will rise to £11,500.

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

And from 2018, Class 2 National Insurance contributions will be abolished, which the government says gives a tax cut of more than £130 to three million self-employed workers.

The Chancellor also delighted drivers when he confirmed that he was freezing fuel duty at 57.95p per litre for the sixth year in a row.

There were fears that he would increase duty for the first time since March 2011 because the cost of fuel has fallen amid tumbling oil prices.

But Mr Osborne insisted that families "shouldn't be penalised" for that situation.

Duties on beer, cider, and spirits were also frozen, but excise duty on tobacco will rise by 2 per cent above inflation from 6pm, with hand-rolling tobacco up by an additional 3 per cent.

In a boost for savers, the ISA limit will be increased to £20,000 a year for all savers, and lifetime ISAs will be introduced for young people.

From April 2017, under-40s will be able to open lifetime ISAs and save up to £4,000 each year.

Every £4 saved in these new ISAs will be topped up by £1 from the government, so if savers put in £4,000, the Government will give them £1,000 every year until they reach the age of 50.

Mr Osborne said: "You don't have to choose between saving for your first home or saving for your retirement - with the new lifetime ISA the government is giving you money to do both.

"For the basic rate taxpayer, that is the equivalent of tax-free savings into a pension and, unlike a pension, you won't pay tax when you come to take your money out in retirement."

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Here is the Budget at a glance:

:: The British economy is growing faster than in any other major advanced country in the world and was "on course for a budget surplus", the Chancellor said

:: An additional £3.5 billion of spending cuts will be made by 2019/20

:: Corporation tax will be cut to 17% by 2020

:: A new sugar tax will be imposed on the drinks industry, which will come into force in two years time

:: Tolls on the Severn Crossings between England and Wales are to be halved by 2018

:: There were moves towards greater devolution, with new powers over the criminal justice system given to Greater Manchester and the creation of more elected mayors, while the Greater London Authority is to retain all business rates by April 2017

:: All primary and secondary schools in England will be an academy, or be in the process of becoming an academy, by 2020

:: The go-ahead was given to HS3 between Manchester and Leeds, the creation of a new four lane M62 motorway between Manchester and Sheffield and an upgrade of the A66 and A69, and Crossrail 2 rail link for Greater London will be commissioned

:: An increase of 0.5% in Insurance Premium Tax to raise £700m for flood defences

:: Fuel duty is frozen for the sixth year in a row, while duty on beer, cider, whisky and other spirits will also be frozen

:: In a boost for savers, from April 2017, the Isa limit will increase to £20,000 a year for everyone, and a new lifetime Isa will be created for under-40s with the Government to boost savings by 25%

:: The tax-free personal allowance is being raised to £11,500 with the Chancellor declaring 31 million people will be paying less tax and 1.3 million of the lowest paid taken out of tax altogether

:: Capital Gains Tax to be cut from 28% to 20%, with the rate paid by basic rate taxpayers down from 18% to 10%.

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