Chancellor George Osborne delivered his pre-election budget on Wednesday 18th March. Not surprisingly, with less than two months until the general election, it was more of a “political” than an economic statement and he seemed to take great delight in stealing the opposition’s thunder on a variety of issues! Of course, many of the key announcements are now made in the annual Autumn Statement and so the majority of changes coming in next month for 2015/16 were known of some time ago.
- The main rate of corporation tax being brought into line with the small company rate at 20%.
- The personal allowance increasing to £10,600.
- R & D tax credit relief for SME’s rising from 225% to 230%.
- The “employment allowance” will again be available with up to £2,000 being deducted from Employers class 1 national insurance contributions.
The 2015 budget statement referred to several matters which will be introduced in future tax years, some of which have still to be consulted on .
- Each individual will be entitled to receive £1,000 of interest on savings tax free (£500 for higher rate taxpayers) from April 2016.
- For the first time, individuals will be able to access money from cash ISA’s and replace it later in the same tax year without it counting towards their annual ISA limit.
- Help to buy ISA’s will be introduced to assist first time buyers to save a deposit for their first home. The Government will contribute £50 for every £200 saved by the individual up to a maximum contribution of £3,000.
- Class 2 national insurance being abolished for self-employed workers. This costs most self-employed people £143 p.a. at present, will the Chancellor find a way to recoup it elsewhere?
- The farmer’s averaging period is being extended from 2 to 5 years.
- The lifetime allowance on pensions is being further reduced to £1m. It’s not so long since this limit was £1.8m!
- It was acknowledged that “it was not remotely acceptable” for the Annual Investment Allowance (AIA) which is currently £500k to revert to £25k on 1st January 2016 as planned. The Chancellor will confirm the limit from that date in his Autumn Statement later in the year.
- The Chancellor signalled his intention to remove the need for individuals and small businesses to file annual tax returns and instead to introduce “digital tax accounts”. Further details on this policy will emerge during 2015 whilst consultation will also take place on how tax payments can be collected through these digital accounts.
You can now download our 2015 budget summary and please contact us through our website should you wish to discuss any of the budget content and how it will affect you further.