Britain is “Walking Tall Again”
The Chancellor has just sat down from delivering his 2015 Budget speech. As predicted there were no major surprises in this Budget but as ever the devil is in the detail. We will provide more information on the changes announced as they emerge.
The main tax and savings matters referred to in the speech were as follows:
- The proposed cut in corporation tax to 20%, with effect from 6 April 2015, will still go ahead.
- The annual investment allowance for capital expenditure will not revert back to £25,000 at the end of the year but will be reviewed
- As an anti avoidance measure Entrepreneur’s Relief will only be available on the disposal of personal assets used in the business when there is a ‘meaningful’ withdrawal from the business.
- The new ‘diverted profit tax’ will be legislated next week alongside the new Common Reporting Standards.
- Film tax reliefs are to be extended and a new tax credit for orchestras to be introduced.
- As previously announced Employers National Insurance for under 21’s is to be abolished with further plans for abolishing Employers National Insurance for apprentices.
- Changes to the requirements for EIS/VCT qualifying companies will be made to include a requirement that a company is less than 12 years old (unless there is substantial change in the company’s activity) when receiving its first EIS/VCT investment.
- For SEED EIS the requirement to spend 70% of the investment before obtaining EIS or VCT funding will be removed
- The National minimum wage is to increase to £6.70 by autumn 2015.
- Class 2 National insurance will be abolished in the next parliament.
- Farmers averaging will be extended to cover a 5 year period.
- There is to be consultation on the use of deeds of variation to avoid inheritance tax.
Savings and income tax
- The personal allowance will increase to £10,800 from April 2016, and to £11,000 in April 2017.
- The higher rate tax band will increase to £43,300 by 2017/18.
- A Fully Flexible ISA will be introduced to enable savers to withdraw and replace savings without affecting their ISA annual allowance, these will be available from autumn 2015.
- A new ‘Help to Buy ISA’ (for first time buyers) will be introduced whereby £200 savings will be matched by a £50 top up by the Government, subject to maximum of £3,000 top up on £12,000 savings.
- There will be a new Personal Savings Allowance which will apply from April 2016 to make the first £1,000 of savings interest tax free, reduced to £500 for higher rate tax payers.
- The 55% tax charge applied to pensioners accessing annuities will be abolished and replaced with a marginal rate tax charge.
- Digital tax accounts for individuals and small businesses will be introduced to remove the need to do annual tax returns.
- Increased penalties for tax evaders and professionals that help them will be announced.
- The Lichtenstein disclosure facility is to be closed at the end of 2015, previously April 2016.
- The lifetime allowance will be reduced to £1m in 2016 from £1.25m.
- The lifetime allowance will be indexed linked by 2018.
- Following a review the Annual allowance will remain unchanged.
- Whisky and other spirit duties will be reduced by 2%.
- Cider duty is to be reduced by 2% from next week.
- Beer duty is to be reduced by 1p per pint from next week.
- Wine duty is to be frozen.
- The planned fuel duty increase in September has been shelved.
This is very much an overview of the speech and more details will be available in the press releases on which we will report in due course. If you do require any further information at this stage please contact our Tax Director Jenny Marks.