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Budget Report 2014

…a budget where we must confront our problems and deal with some hard truths.”

Your Budget Highlights – 2014

Yesterday was one of those exciting days in accountancy when we all eagerly wait for news from the Chancellor on how he is going to shape the economy moving forward.

On the whole, the Budget was largely neutral with some headline making statements, particularly with regards to savings, pensions and the annual investment allowance for capital expenditure. However, George Osborne has continued along his path with “…a budget where we must confront our problems and deal with some hard truths.”

Please find attached our summary of the 2014 Budget to read and digest; the highlights being as follows:

  • The personal allowance is to be increased to £10,500 from April 2015
  • The ISA limit increased to £15,000, the amount can now be saved wholly in cash
  • The annual investment allowance was increased to £500,000 from April 2014 until the end of 2015
  • The rate of the R&D tax credit payable to loss making small and medium sized companies to increase from 11% to 14.5% from April 2014.
  • Cuts were made in the main rate of corporation tax from 28% to 23%, and to 20% by 2015-16.
  • From April 2015 the 10% savings rate will be reduced to 0%
  • The Tax-Free Childcare costs cap, against which parents can claim 20% support, will be increased to £10,000 per year for each child.
  • The Help to Buy: equity loan scheme will be extended to March 2020 to help a further 120,000 households to buy a new-build home.
  • From 2015-16 married couples and civil partners will be able to transfer £1,050 of their income tax personal allowance to their spouse or civil partner
  • The threshold for the small loans exemption limit will be increased from £5,000 to £10,000 from April 2014.
  • For pensions there is no longer a need to buy an annuity. The amount that can be taken out as a lump sum has also been increased from £18,000 to £30,000 and finally the tax rate on a lump sum withdrawal from a pension has been reduced from 55% to marginal rate.
If you have any questions on how the budget may affect you or your business please feel free to contact us.

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