Osborne Budget bids to continue ‘comeback’

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Speaking on 18 March, Mr Osborne described Britain as “the comeback country” as he unveiled measures that he said would support small business owners, the self-employed, homebuyers and families and help “hard-working people keep more of the money they have earned”.`David Whiscombe of UK200Group member firm BKL Tax rounds up announcements with implications for business and personal finances.`

 

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Chancellor George Osborne used his last Budget before the general election to claim that Britain was “walking tall again”.

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Speaking on 18 March, Mr Osborne described Britain as “the comeback country” as he unveiled measures that he said would support small business owners, the self-employed, homebuyers and families and help “hard-working people keep more of the money they have earned”.

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David Whiscombe of UK200Group member firm BKL Tax rounds up announcements with implications for business and personal finances.

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Businesses

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·         The fuel duty increase scheduled for September 2015 has been cancelled.

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·         From 1 April 2015, the VAT registration threshold will be increased from £81,000 to £82,000 and the deregistration threshold from £79,000 to £80,000.

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·         From 18 March 2015, entrepreneurs’ relief on capital gains tax – which cuts the rate payable to ten per cent – will not be available on gains made on personal assets used in a business unless the claimant is disposing of at least a five per cent shareholding in a company or of partnership assets. The government will target business structures set up so that people with only a small indirect stake in a trading company benefit from entrepreneurs’ relief.

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·         Class 2 national insurance contributions (NICs) for the self-employed will be abolished in the next Parliament. Consultation will take place this year on replacing class 4 NICs for the self-employed with a new contributory benefit test.

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·         The Budget confirmed that a major review of business rates would take place.

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·         In April 2014, the annual investment allowance, which enables businesses to deduct investment in plant and machinery from pre-tax profits, up to a certain threshold, was increased to £500,000 a year until 31 December 2015. Mr Osborne said it would be better to address this in the Autumn Statement, usually issued in December, but that a reduction to the usual rate of £25,000 “would not be remotely acceptable”.

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Personal finances

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·         The income tax personal allowance – which will increase to £10,600 from 6 April – will rise again to £10,800 in 2016-17 and £11,000 in 2017-18. The higher rate threshold, above which income tax is paid at 40 per cent, will increase to £42,385 in 2015-16, £42,700 in 2016-17 and £43,300 in 2017-18.

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·         A new Personal Savings Allowance will be created from April 2016, exempting the first £1,000 of savings income from any tax for basic rate taxpayers and the first £500 for higher rate taxpayers. The automatic deduction of 20 per cent income tax by banks and building societies on non-ISA savings will end at the same time.

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·         ISAs will be made more flexible, so that savers can withdraw and replace money in the same tax year without losing the tax benefits. The Budget document said the rules would change in the autumn this year.

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·         Under a new Help to Buy ISA scheme, the government will provide a bonus on savings used to buy a first home. For every £200 a first-time buyer saves, the government will provide a £50 bonus, up to a maximum of £3,000 on £12,000 of savings. The bonus will be available on homes valued at up to £450,000 in London and up to £250,000 outside London.

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·         The pensions lifetime allowance – the amount that can be saved into pension pots and benefit from tax relief – will be reduced from £1.25 million to £1 million from April 2016. Transitional protection for pension rights already over £1 million will be introduced alongside this and the allowance will be indexed annually in line with the consumer price index from 6 April 2018.

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·         From April 2016, people already receiving income from an annuity will be able to sell that income to a third party, subject to agreement from their annuity provider, for a lump sum or an alternative retirement product, with tax on the lump sum or drawdown income payable at their marginal rate.

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·         If all the beneficiaries agree, a deed of variation can be used to change the terms of a will, which can help to reduce inheritance tax bills. The Budget said the government would review the use of deeds of variation for tax purposes.

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For further information on this article, David can be contacted at BKL Tax on telephone: 020 8922 9222 or email: david.whiscombe@bkltax.co.uk

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UK200Group - Established in 1986, UK200Group is the leading mutual professional association in the UK with over 110 UK quality assured independent chartered accountancy firms and lawyer firms, as well as 50 International Associate member firms around the globe.  UK200Group provide services and products that are designed to enhance the business performance of its members. Telephone: 01252 401050 or 01252 350733 Email: admin@uk200group.co.uk

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UK200Group is an association of separate and independently owned and managed chartered accountancy and lawyer firms. UK200Group does not provide client services and it does not accept responsibility or liability for the acts or omissions of its members.  Likewise, the members of UK200Group are separate and independent legal entities, and as such each has no responsibility or liability for the acts or omissions of other members.


Summary: Speaking on 18 March, Mr Osborne described Britain as “the comeback country” as he unveiled measures that he said would support small business owners, the self-employed, homebuyers and families and help “hard-working people keep more of the money they have earned”.`David Whiscombe of UK200Group member firm BKL Tax rounds up announcements with implications for business and personal finances.`
Publication Name SAIFinsight
Sector Business
Magazine Link http://www.saif.org.uk/website/public/index_public.html
Attachment SAIFinsight_Apr15
Date 15 Apr 2015

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