As with every year, there is a limited pot of funds to play with and it is impossible to please everyone, the government of the time try their best to please the largest voting groups and keep the country from ruin… its a tough balance.
Here are this years highlights:
Personal Tax:
- The tax-free personal allowance will increase to £10,500 from April 2015.
- Transferable tax allowances for married couples – from 2015/16, married couples and civil partners will be able to transfer £1,050 of their personal allowance to their spouse or civil partner (eligible where neither partner is a higher/additional rate taxpayer).
- Starting rate for savings income – from 2015/16, the maximum amount of an eligible individual’s savings income that can qualify for the starting rate of tax for savings will increase from £2,880 to £5,000. The starting rate will also reduce from 10% to nil.
Corporate & Business Tax highlights:
- As previously announced, the Corporation tax rate will reduce to 21% from April 2014 and 20% from April 2015. With the merging of the normal and small rate at 20%, associate companies rules will be simplified in April 2015 based on 51% shareholding.
- From April 2014 until the end of 2015, the Annual Investment Allowance will be doubled from £250,000 to £500,000.
- Research and development (R&D) tax credits – the rate of tax credit payable to loss making small and medium enterprises will increase from 11% to 14.5% from April 2014.
Pensions & Savings highlights:
- Radical reform of pensions, effectively introducing flexible drawdown for all defined contribution schemes.
- Flexible drawdown minimum income requirement reduced to £12,000 from £20,000.
- Maximum capped drawdown income increased from 120% to 150% of max Government Actuarial Department rate.
