George Osborne presented the 2015 Budget on Wednesday 18 March 2015.
This blog focuses on the direct and indirect tax measures announced, as well as the announcements made previously which affect the 2015-16 tax year and beyond.
It concentrates on the issues likely to affect you, your family and your business.
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 £10,600 from April 2015, and then to £10,800 from April 2016 and £11,000 from April 2017.
- The higher rate tax threshold will be £42,385 for 2015-16, £42,700 for 2016-17 and £43,000 in 2017-18.
- Basic rate tax payers will have a £1,000 tax free savings allowance from April 2016. Higher rate tax payers will have a £500 allowance. Those paying the additional rate (income over £150,000) will not benefit from the allowance at all.
- The deduction of tax on interest at source by bank and building societies will cease from April 2016.
- ISAs will become more flexible – if you take money out, you can reinvest it within the same tax year without losing the tax free status.
- A new ‘Help to Buy’ Isa will be introduced for first time buyers.
- Pensioners who have already bought annuities will be able to sell their annuities for a cash lump sum (taxable at marginal tax rates).
- The need to file annual personal tax returns will be abolished over the course of the next parliament.
A reminder of key changes announced previously
- 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 earnings limit, for those employees.
- From 6 April 2016, employers with apprentices under the age of 25 will no longer be required to pay employers National Insurance contributions (NI) on earnings up to the upper earnings limit, for those employees.
- From 6 April 2015, married couples and civil partners will be able to transfer part (£1,060) of their personal allowance between them in certain circumstances.
- 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.
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. Of course, the General Election is looming too, so announcements in respect of future tax years are more likely to change than they might otherwise have been!
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.