Spring Budget 2016 Briefing

Briefing Notes

This was the third Budget within the space of 12 months. It threatened to be the most difficult of the trio because of constraints imposed by June’s EU referendum and disappointing economic numbers. Since the Chancellor presented his Autumn Statement in late November 2015, the Office of Budget Responsibility has reduced its forecasts for UK GDP growth for the next five years from 2.4% p.a. to 2.1% p.a., primarily due to lower expectations for productivity growth; this, together with lower levels of anticipated inflation, has cut projected tax revenues. Nevertheless, the Chancellor managed to produce several surprises, including net tax cuts in 2017/18 and 2018/19 before reaching his often repeated goal of a budget surplus in 2019/20.

Although the spectre of pension reforms had disappeared before the Chancellor rose to his feet, he did announce something very similar to a pension ISA in the form of a new Lifetime ISA for the under‐40s, starting in April 2017. Savers will also benefit from a range of other measures, including an increase in the main ISA limit to £20,000 in 2017/18, a reduction in the rates of capital gains tax and an extension of entrepreneurs’ relief to external investors in unlisted companies.

Follow this link to read a summary of some of the main points we believe will be of interest to you.