Budget 2014 – Highlights

Last week, George Osborne announced his 5th annual budget, hailed as a savers BUDGET; here are some of the highlights.

Whilst there is not much for micro and small businesses, we have been urged to “export more, build more, invest more and manufacture more”.

Business in enterprise zones (of which nearby is Manchester Airport City Enterprise Zone) will see their business rates discounted. Furthermore, business rates will continue to be cut or held with small company relief being extended to April 2015.

The Annual Investment Allowance has been increased to £500,000, great news for those companies that are looking to invest in new plant and machinery as they can now receive 100% tax relief on the qualifying expenditure. This will result in nearly every business in the UK paying no upfront tax when they invest in the future.

The Chancellor made a pre-announcement about the new NIC Employment allowance of £2,000 which starts in April 2014. This will remove the first £2,000 for employer’s NIC bill for every UK business. Furthermore, from 2015 there will be no employer national insurance for under 21s (unless they earn the upper earnings limit).

Class 2 NIC collections for self-employed will move into self-assessment (currently £2.75 pw) from April 2016.

Research and Development tax credit for loss-making small businesses from 11% to 14.5%.

For those of us that work within a social enterprise framework, you are now entitled to 30% Tax Relief. And if you work within the film industry, the film tax credit has been extended.

Company car tax to increase by 2% in 2017/2019 and 2018/2019 however the discount on low emission cars is to be increased.

Personal allowance has been raised to £10,000, increasing further to £10,500 next year, resulting in the average tax payer £800 pa better off. Furthermore, the higher rate threshold will rise to £41,865 next month then by a further 1% to £42,285 next year.

The annual limit for ISA’s is set to be raised to £15,000 pa, with Junior ISA’s raising to £4,000. This means that you could potentially save up to £19,000 pa tax free from July 2014.

Further tax free investments can be made in Premium Bonds increasing the amount you can invest from £30,000 to £40,000 in June, and to £50,000 next year.

The 10% tax on savings (for those earning less than £13,000) is to be scrapped being replaced with 0% on savings up to £5,000 – benefiting pensioners and stay at home parents.

Tax restrictions on access to pension pots to be removed, resulting in no requirement to buy an annuity. This will mean that you can chose to take your money when you want it and pay the marginal rate of income tax.

In another step to help us keep the money that we have worked hard for, the increase in total pension savings that pensioners can take as a lump sum has been raised to £30,000 (from £18,000). This will give more flexibility to retirees.

Furthermore, a new pensioner bond will be available from January 2015, supplied by NS&I with market leading rates for over 65s.

If you are in the unfortunate position of being accused of using a tax avoidance scheme and are now appealing, tax liabilities are now due up front whilst appealing, rather than collected after the decision has been made.

The economy is expected to grow by 2.7 % in 2014, higher than originally expected and whilst the Chancellor has promised “no quick fixes” he has forecasted “jobs up, growth up and defecit down”.

These are the highlights that we feel are of interest to you, should you feel that there is anything that you would like to discuss further then please do not hesitate to contact us on 07542 299247 or email us at info@mooreaccountancy.co.uk

I hope you’ve found this interesting, if you like a tipple can I suggest Scotch Whiskey or Cider, both of which have seen their duties frozen!