The highlight of the Budget was the proposed radical reform of pensions. It will be extremely interesting to see how this pans out. The tax advantages of paying into a pension are well known and the ability to have more freedom in how the funds are drawn on retirement will make this an extremely interesting planning opportunity. Watch this space!
Pensioner Bonds and super ISA’s were also good news for savers.
For businesses, the small companies profits’ rate remains at 20% in 2015 and the VAT registration threshold will rise (as it usually does every April) to £81,000. The doubling of the AIA to £500,000 is good for businesses with a larger capital investment programme. Raising the personal allowance to £10,500 is welcome but there needs to be a similar rise in the NIC threshold to ensure no tax or NI before £10,500. One bonus is that we have the £2,000 employment allowance against employers NIC from April 2014.
Business Tax Summary
Annual investment allowance to double from £250,000 to £500,000 from 1 April 2014 until 31 December 2015
R&D tax credit increased from 11% to 14.5% from April 2014
SEIS and rollver relief made permanent
VAT threshold increased in line with inflation to £81,000
Housing boost -Help To Buy extended to 2020 and £500m Builders Finance Fund
Increase in company car rates – The fuel benefit charge multipliers for both company cars and vans will increase in line with inflation for 2015 to 2016. Discount for low emissions improved
£85m promised for extra apprenticeship grants
Rates relief extended for small businesses
Personal tax summary
Personal allowance to rise to £10,500 in 2015/16
Class 2 NIC moved into SA from 2016-17
ISAs merged and limits increased to £15,000
Increased pension flexibility – amount that can be taken out as a taxed lump sum rises to £30,000 from 27 March 2014
Anti-avoidance and tax administration
Upfront payments for disputed schemes to start this year
Net widens in stamp duty clampdown