Budget 2014 – Summary

George Osborne presented the 2014 Budget on Wednesday 19 March 2014.

This blog focuses on the direct and indirect tax measures announced, as well as the announcements made previously which affect the 2014-15 tax year and beyond.

It concentrates on the issues likely to affect you, your family and your business. To help you decipher what was said I have included some comments too.

If you have any questions please do not hesitate to contact me for advice.

Main Budget proposals

  • The personal allowance for tax will increase to £10,500 from April 2015.
  • Tax relief will be given for the first £10,000 of child care for each child from Autumn 2015 (worth up to £2,000 per child).
  • The staring rate for savings income will reduce to zero on the first £5,000 of qualifying savings from 6 April 2015.
  • ISAs will become NISAs and the investment limit will increase to £15,000, all of which may be in cash.
  • The annual investment allowance for capital expenditure will increase to £500,000 per annum until 31 December 2015.
  • Major changes were announced to defined contribution pension schemes.

Key announcements made previously

Autumn Statement:

  • From 6 April 2015, employers with employees under the age of 21 will no longer be required to pay employers National Insurance contributions (NI) on earnings up to the upper earning limit, for those employees.
  • From 6 April 2016, married couples and civil partners will be able to transfer part of their personal allowance between them in certain circumstances.

Previous budgets:

  • The personal allowance for tax will increase by £560 to £10,000 from April 2014.
  • The main rate of corporation tax rate (ie for larger companies) will decrease to 20% with effect from April 2015.  This aligns the rate with that payable by small companies, and the two rates will be merged.
  • All businesses will be eligible for relief for the first £2,000 of employer’s NI (but this is partly countered by the fact that employer’s will no longer be able to claim back any statutory sick pay paid to their employees).
  • The limit for tax free loans for employees will increase to £10,000 from 6 April 2014.

 

The Budget proposals may be subject to amendment in the Finance Act. You should contact me before taking any action as a result of the contents of this summary.

This blog is published for the information of clients. It provides only an overview of the main proposals announced by the Chancellor of the Exchequer in his Budget Statement, and no action should be taken without consulting the detailed legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this summary can be accepted by the authors or the firm.

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