Budget 2016 – Other notable announcements | Wright Vigar

Budget 2016 – Other notable announcements

 In News, Treasury Updates

Soft drinks industry levy

A new soft drinks industry levy is set to be introduced from April 2018. This will be paid by producers and importers of soft drinks that contain added sugar, but there will be an exclusion for small operators. The levy will be charged on volumes according to total sugar content, with a main rate charge for drink above 5 grams of sugar per 100 ml and a higher rate for drinks with more than 8 grams of sugar per 100 ml.

Lifetime ISA and ISA limit – great news for younger investors

A new Lifetime ISA will be available from 6 April 2017 for individuals between the ages of 18 and 40. They will be able to contribute up to £4,000 per year, and receive a 25% bonus from the government until their 50th Birthday. For every £4 invested, the government will add £1. Funds, including the government bonus, from the Lifetime ISA can be used to buy a first home at any time once the account has been open for 12 months, or can be withdrawn once the individual is aged 60.

In addition the overall annual ISA subscription limit available to all individuals will be increased from £15,240 to £20,000 from 6 April 2017.


As announced at the Autumn Statement 2015, an apprenticeship levy will be introduced in April 2017, and employers that are committed to training will be able to get out more than they put in. From April 2017, employers will receive a 10% top-up to their monthly levy contributions in England and this will be available for them to spend on apprenticeship training through their digital account. The government will set out further details on the operating model in April and draft funding rates will be published in June.

Class 2 NIC contributions for self-employed to be scrapped from April 2018

Self-employed people currently have to pay Class 2 NIC at £2.80 per week if they make a profit of £5,965 or more per year and these contributions enable self-employed people to build entitlement to the state pension and other contributory benefits. They also pay Class 4 NIC if their profits are over £8,060 per year.

From April 2018, Class 2 NIC’s are being abolished. In order to ensure that self-employed people can continue to build benefit entitlement following abolition, Class 4 NICs will also be reformed.

Welcome cuts to business rates for small businesses

From April 2017, small businesses that occupy property with a rateable value of £12,000 or less will pay no business rates. Currently this full relief from business rates in only available for businesses that occupy properties with a value of £6,000 or less.

Businesses with a property with a rateable value between £12,000 and £15,000 will receive a tapered rate of relief.

As a result of these changes, 600,000 small businesses will pay no business rates at all and an additional 50,000 will benefit from tapered relief with effect from April 2017.


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