We were watching the budget today with baited breath, particularly given the predictions around Pension changes and possible investment for the North of England. In the end it was the reduction in the Pension Allowance to £1million which had the biggest impact on our team. We will be working through the implications for our clients over the coming days, and we’ll share more of our thoughts here, but in the meantime here is a quick rundown of the major changes.
Pensions / Savings
Annuity access rules changed to give pensioners access
£15,240 NISA allowance made flexible (cash withdrawn can be reinvested back into the NISA within the same tax year)
Help to Buy ISA introduced for first time buyers – Government to add £50 for every £200 deposit
New Personal savings allowance introduced – From 2016 first £1,000 of interest earned from savings will be tax free
Taxation/Welfare
Personal tax allowance – increased to £10,600 from April 2015 (£10,800 April 2016 / £11,000 2017)
Higher rate tax threshold – increased to £42,385 April 2015 (£43,300 April 2017)
Lifetime Allowance – reduced to £1million from 2016 (from 2018 lifetime allowance to be indexed)
Corporation tax to be reduced to 20%
Class 2 NI abolished for self employed in next parliament
Annual tax return to be abolished altogether from 2016
Big multinational companies to be targeted on profits tax. 25% charge to be levied on diverted profits made in the UK – to take effect April 2015
Review of deeds of variation used to avoid IHT – report due in Autumn 2015
Bank Levy raised to 0.21% (raising an additional £900m a year)
Banks also targeted to pay profits from mis-sold products
£75m funding committed for servicemen and women
National Insurance abolished for U21s from 2015
Automatic Charity Gift Aid raised from first £5,000 to £8,000
New Horse Race betting right to be introduced
Duties
Beer duty cut by 1p a pint
Cider duty cut by 2%
Scotch Whisky duty cut by 2%
Wine duty frozen
Transport/Fuel/Energy
Fuel duty to remain frozen again
Air passenger for children under 12 abolished (from 2016 for under 16)
From April 2015 – Tax allowance and initiatives to enable growth in the UK’s oil fuel sector
Petroleum revenue tax to be cut from 50% to 35% from 2016
Northern Powerhouse
Various commitments to growing transport, industry and skills to create growth of Northern citiesPlus – Various other commitments and initiatives to be applied to Southern England & Wales
Housing
Commitment to funding for additional housing in London
Help to Buy NISA introduced for first time buyers
