Chancellor George Osborne’s fifth Budget statement was delivered today at 12.30pm. The Chancellor’s message was that although the economy is more resilient and the recovery is much better and faster than forecasted, it does remain fragile and so he still has some tough decisions to make which will affect us all.
He is keen however to reward those of us who work hard and want to get on and he wants to support the UK’s businesses to encourage growth and aspiration.
If you are a maker, doer or saver then this was a Budget for you!
So what were the key announcements from today’s Budget?
For businesses
A summary of the Budget announcements that could affect your business are:
- The Annual Investment Allowance doubled to £500,000 from April 2014 until the end of 2015;
- Class 2 National Insurance Contributions for the self-employed will be collected through the Self Assessment system with effect from April 2016;
- The rate of Corporation Tax is to reduce from 21% to 20% from April 2015;
- £1,000 reduction in business rates;
- £2,000 employment allowance for all employers;
- ‘Builders Finance Fund’ is being made available to small and medium sized house building firms to encourage house building;
- The Government finance on offer to UK businesses wanting to sell abroad is doubled to £3bn to encourage exports;
- Over 100,000 apprenticeship grants offered to employers from April 2014 to April 2016;
- Enhanced capital allowances and preferential business rates for business premises located in enterprise zones;
- Increase in Research & Development tax credit from 11% to 14.5% for small businesses;
- Cut in energy bills for British manufacturers;
- Introduction of the Theatre Tax Relief of 25% from September 2014;
- 15% rate of Stamp Duty Land Tax for properties costing £500,000 or more and purchased by certain companies and partnerships.
For households
Key Budget 2014 announcements affecting your personal finances are:
- Increase in the tax free personal allowance to £10,500 from April 2015;
- Higher rate threshold for income tax increased to £41,865 from April 2014 and £42,285 from April 2015;
- Transferable tax allowance for married couples and civil partners at a rate of 10% of the personal allowance, equal to £1,050 for 2015/2016;
- New single ISA limit of £15,000;
- Junior ISA limit increased to £4,000 from April 2014;
- New ‘Pensioner Bond’ for over 65s from January 2015 offering up to 4% interest;
- Removal of tax restrictions on ‘Defined Benefit’ pension schemes providing more flexible access to the pension funds and access to free and impartial advice from consumer groups;
- Reduction to the punitive tax rate from 55% to the marginal rate of tax (in most cases this could be as little as 20%);
- 10p starting rate of tax for savers abolished from April 2015, replaced with a 0% rate of tax on up to £5,000;
- Increase the tax free childcare support to £2,000 per child per year;
- Freeze in Council Tax rates;
- Cut in household energy bills.
VAT and duties
A summary of VAT and other indirect tax changes made in the Budget are:
- The VAT registration threshold will be increased to £81,000 and the deregistration threshold increased to £79,000 from April 2014;
- VAT on fuel waived for air ambulances;
- Fuel duty rise due in September cancelled saving you £11 every time you fill the tank;
- Tobacco duty rise of 2% above inflation with exception of Scotch Whisky and other spirits, the duty of which are frozen;
- Duty frozen on ordinary cider;
- Beer duty cut by 1p per pint;
- Air passenger duty for long haul flights reduced from April 2015;
- Horse race levy extended to offshore bookmakers;
- Bingo duty halved from 20% to 10%.
Other announcements
Other announcements made in Budget 2014 are:
- New look £1 coin to be released which is based on the old thruppenny bit to reduce counterfeits;
- More robust reforms and powers to HM Revenue & Customs to help discourage users of disclosed tax avoidance schemes;
- Inheritance Tax charge waived for emergency service workers who lose their lives in action;
- Help to Buy scheme extended to March 2020;
- Extra £140m to help support flood defences;
- Extra £200m support available to improve roads and repair potholes which each local authority has the right to bid for their share.
HOW TO MAKE THE MOST OF OUR SERVICES
Today’s Budget serves as a reminder to us all that we should ensure that our personal and business budgets and plans reflect the reality of our available income and necessary expenditure.
We can help you review your plans which may or may not have changed since George Osborne’s Budget announcements. We can help you to adapt your plans as necessary to take into account your own personal and business circumstances and objectives.
Your plans may include:-
- Purchasing that all important piece of equipment or other asset for your business;
- You are an employer and want to make sure that you claim the £2,000 employment allowance;
- You are purchasing new business premises and are unsure whether this qualifies for the enhanced capital allowances or preferential business rates;
- Your pay rise means you may fall within the higher rate tax thresholds;
- You are a working parent who wishes to place your child into childcare;
- You are thinking of buying a new home.
Whatever your plans or goals, we would love to be given the opportunity to help you achieve them so please do not hesitate to get in touch with Sarah Seavor on 07712 218540 or sarah@seavorchartered.co.uk to see how we can help you.
