Posts in Category: Budget

Welcome to the 2014/15 tax-year! 

Monday, April 07, 2014 4:01:00 PM Categories: Budget Investments ISAs pensions Regulations

As I am sure you are aware, the 2014/15 tax-year started on Sunday 6th April. The new tax year promises to be an interesting one with the introduction of the NISA (New ISA) from 1 July, which will allow contributions up to £15,000, as well as the new flexibility with regard to pensions (although the real flexibility comes in in July 2015 where the whole pension fund can be taken as a lump sum, less tax at your marginal rate).

If you would like to discuss any of these topics or indeed any other area we can assist in, please get in touch.

The Autumn statement 

Friday, December 07, 2012 10:42:00 AM Categories: Budget Economy

A summary of the key points

• The Office for Budget Responsibility cut growth forecasts for 2012 down from 0.8% to -0.1%. Next year’s estimate was revised down to 1.2% from 2%.

• Borrowing in the current financial year has been revised lower to around £80bn, thanks mainly to the coupon transfer from the Bank of England’s gilt holdings. It is expected to rise to £99bn in 2013-2014.

• The DMO has announced a cut in the number of Treasury bill auctions of £15bn in the current financial year following the downward revision to borrowing. This has benefitted the short-end of the yield curve, but 30 year yields have risen. This afternoon, 10 year yields are at 1.76%.

• The Chancellor announced a number of fairly significant tax changes: the 3p rise in fuel duty planned for January has been scrapped while corporation tax will be cut in April 2014 from 22% to 21%.

• Mixed news on pensions - the annual tax free allowance will be cut to £40,000 from £50,000 in 2014 while the lifetime allowance will be reduced to £1.25m from £1.5m. However, the capped drawdown limit for pensioners is being increased from 100% to 120%.

• For higher earners, the threshold for paying 40% income tax is being increased by 1% in both 2014 and 2015 but still at a slower pace than inflation. Capital Gains Tax and Inheritance tax exemptions will also be increased by 1%. The basic income tax threshold is to be raised by more than previously announced, to £9,440.

• The Chancellor hopes to raise £5bn over the next six years in tax from undisclosed Swiss bank accounts through a treaty with Switzerland. There were also a number of measures announced designed to combat tax evasion including 2,500 more inspectors.

• The ISA limit will be increased in April to £11,520 while the government plans to consult on allowing investments in small and medium scale enterprises equity markets like AIM to be held directly in ISAs.

• A number of infrastructure investments were announced for road, rail and broadband services.

If you would like to discuss any of these changes please get in touch

Budget 2012: The key points 

Friday, March 23, 2012 11:18:00 AM Categories: Budget

On Wednesday the Chancellor presented his 2012 Budget. The key impact areas are shown below.

  • From April 2013, the 50% additional rate of income tax will be cut to 45% and to 37.5% from 42.5% for dividends.
  • The personal income tax allowance will rise to £8,105 from April 2012 and to £9,205 from April 2013. There will also be a freeze on existing age-related allowances from 6 April 2013.
  • The basic rate tax limit reduces from £35,000 to £34,370 for 2012/2013 and £32,245 for 2013/2014.
  • The State Pension will reform into a single tier pension for future pensioners and future increases in State Pension Age will take account of increases in longevity.
  • The main rate of corporation tax will be cut to 24% from next month. By 2014 it will fall to 22%.
  • Qualifying policy investments will be restricted to an annual premium limit of £3,600 from 6 April 2013, with transitional rules applying from 21 March 2012.
  • The capital gains tax exemption remains frozen for 2012/2013 at £10,600.

On the inheritance tax front, the Government is consulting on a range of topics. They include increasing the exempt amount that someone living permanently in the UK can transfer to a spouse or civil partner living permanently outside the UK.

If you would like to discuss any of these areas please get in touch through the Contact Us option at the top of the page.