Today’s Budget was always going to have significant political influences with the General Election a couple of months away; but despite that, there were some useful changes brought in by George Osbourne.
Here are Moore Accountancy’s Top 10 Highlights (in no particular order!)
- Basic rate savers will receive the first £1,000 interest earned tax free. This is up to £500 for higher rate tax payers – effective April 2016.
- Creation of a new “Help to Buy” ISA for first time buyers. You can save up to £200 pcm towards your first home. The government will boost it by 25%, so if you save £200, the government will top up by £50, up to a maximum of £3,000.
- New Flexible ISA – This will enable individuals to withdraw money out of their ISA and put it back (in the same tax year) without losing tax free status.The current ISA limit is £15,240 pa in 2015/16.
- Personal Tax free allowance for individuals will be £10,600 for 2015/16, rises to £10,800 in 2016/17 and up to £11,000 by 2017/18. This is combined with increases to the higher rate threshold, which will start at £42,385 in April 2015, increase to £42,700 in 2016/17 and up to £43,300 in 2017/18.
- Minimum wage will rise to £6.70 in October 2015 for adults with the biggest increase for apprentices who will be earning £3.30 (up from current rate of £2.73)
- Fuel duty increase has been cancelled, which means that it has been frozen for 5 years. This will help motorists, but it is important to ensure that the government is still focusing on UK public transport too. The Budget did announce a new transport strategy for the North to help create a “Northern Powerhouse”.
- Pensions lifetime allowance will be cut from £1.25m to £1m from April 2016, but from 2018 this level will be index linked to protect existing pension pots.
- From April 2016, annuity owners will be able to sell on their annuity and pay their usual rate of income tax instead of the current 55%. This will enable more flexibility for pensioners and follows both last year’s Budget and the Autumn Statement 2014 which began the process of “giving more freedom to pensioners to spend their pension cash as they please”.
- Annual paper tax returns to be abolished. Details will be uploaded automatically online. The devil will be in the detail, as we are not sure yet if this will mean more work for small businesses who may have to file monthly or quarterly instead of annually.
- Business rates receipts devolved to Manchester, meaning the area will retain 100% of business rates raised.
There are a number of other changes including gift aid for Charities and corporation tax for companies, but these were our favourites. Get in touch with Moore Accountancy at firstname.lastname@example.org or on 07542 299 247 if you want to find out more information as to how the Budget 2015 will affect you or your business.
And for those who wish to have some bedtime reading with the details of the above then please find the official link to the 124 page Budget 2015 document here.