March Budget 2014

March Budget 2014

Here’s what you need to know: 

Personal Taxation, Savings and Pensions

  • The Personal Allowance will increase to £10,000 this year and £10,500 next year.
  • The Higher Rate Tax Band will rise from £41,450 to £41,865 and then by a further 1% to £42,285 next year.
  • Cash and Stocks & Shares ISA’s will be combined and given a new tax free limit of £15,000 per annum.
  • A new Pensioner Bond will be released.  The value will be £1 billion in total at a limit of £10,000 per bond.
  • The limit on Premium Bonds will be increased for the first time in a decade from £30,000 to £40,000.
  • The Lump Sum you can take from your pension increased to £30,000
  • The 55% punitive tax on drawdowns reduced to a 20% income tax.
  • The 10p rates for savers will be abolished on £5,000 of savings income.

Tax Avoidance

  • The number of registered tax schemes has reduced by 50%
  • Upfront payment will be requested from the users of registered schemes.  They are able to challenge this in the courts and interest will be paid back if required.
  • The budget to “tackle” non-compliance will be increased.
  • Anyone purchasing a residential property within a corporate wrapper will be charged 15% Stamp Duty

N.B – We’re pleased to confirm that the structures we offer are unaffected by Budget 2014.

Here’s the rest:

The Economy

  • The economy is now expected to grow by 2.7% in 2014.  This has been revised upward by the Office of Budgetary Responsibility (OBR) from the previous projection of 2.4%.
  • Growth in 2015 is projected at 2.3% and then remaining steady at 2.6% in 2017 and 2018
  • The situation in Ukraine and the Crimea is unlikely to affect the UK economy but may result in high commodity prices, increased inflation and slower growth.
  • Unemployment is down from 8% in 2010 to 5% in 2014.
  • The UK has a higher employment rate than the US for the first time in 35 years.
  • The deficit is projected to fall from 6.6% to 0.8% in 2017
  • Government borrowing is expected to fall from £108 billion to £17 billion in 2017.
  • £42 billion will be saved on interest payments due to the reduction in government debt
  • The 2% inflation target will be kept for the next few years
  • Reserves of foreign currency are now 50% higher than they were in 2010
  • Pay restraint in the public sector will continue
  • £1 billion underspend in government is to be made permanent.
  • Welfare Spending is to set at £119 billion for 2015-16 rising to £127 billion in 2018-9.

Business, Investment and Duties

  • New powers given to the Welsh Government to fund and tax for infrastructure investment
  • £140 million made available for flood damage and renewing defences
  • £200 million made available for pothole repairs
  • Class 2 NICs brought into the self-assessment system and will no longer be a weekly amount
  • High Street stores will get £1,000 off their business rates
  • Businesses will get the £2,000 Employment Allowance.
  • The Annual Investment Allowance has been increased to £500,000 benefiting 99.8% of businesses.
  • £7 billion package to cut energy bills for UK manufacturing
  • Fuel Duty Rise will not take place saving 20p per litre had the rise taken place
  • Tobacco Duty will rise by 2%
  • Scotch whisky and Cider Duty will be frozen
  • Beer Duty will be cut by 1p

Speak to LaingRose and find out how companies, sole traders and partnerships reduce their tax liabilities and protect their assets by utilising tax planning strategies.  Call us now on 0845 388 9002 for a free consultation or send us an email at info@laingrose.com