Submitted by Sestini & Co
| on Thu, 03/20/2014 - 7:55 | In Uncategorized
By now, the papers have had a field day with their budget deadlines and the PM has already had cause to embark on a lengthly defense of the “pensions overhaul” (which apparently stunned the City according to at least one report).
But what isn’t leaping to the fore in all of the coverage?
- the personal allowance is set to increase this year and again in April 2015, but there is still no alignment with National Insurance Contributions so many of those now free of income tax will still pay national insurance and payroll operation will continue to be as complex as ever;
- I couldn’t see anything on simplifying auto enrollment (well, one can but hope) and the limits are again different from those for income tax;
- the limit for tax-free low-interest or interest-free loans for employees has been raised from £5,000 to £10,000 – great news for commuters with expensive season tickets;
- tax free child care: moving away from the cumbersome voucher scheme can only be good news and the new measures mean that the self employed and lower earners can benefit;
- Class 2 national insurance contributions will be collected via Self Assessment from Aoril 2016 rather than via their current, separate collection process – good news for HMRC and the newly self-employed alike as that is a genuine simplification (I believe the marvellous John Whiting may have been instrumental in this);
- ISA’s are becoming more interesting: the change in annual contribution limits has attracted much attention, but the scope of permitted investments is widening, possibly to include crowd funding as well as peer to peer lending;
- there will be 30% tax relief on social investment to qualifying organisations (yay!);
- the Seed investment scheme is being made permanent: 50% income tax relief and capital gains tax relief at up to 28% is not to be sneezed at (in fact, certain taxpayers can be better off even if they lose all their original investment!);
- Wales will have greater tax & borrowing powers including (one for the locals) funds to improve the M4 (double yay!)
- and lastly, one of my “favourites”, the annual tax on enveloped dwellings (ATED), which was announced only two years ago, alongside a higher rate of stamp duty (15%) and capital gains tax for non-residents, was introduced to apply to properties valued at over £2,000,000. It was easy to see that this might reduce gradually over time but the threshold will now decrease to £500,000. There are exemptions for properties rented out but these need to be claimed, so there is the potential for a lot more paperwork for landlords and property development companies. The change in threshold will be phased in but it is a huge difference and somewhat at odds with the stated reasons for introducing these measures.
The pensions changes are wide in scope and in application so they get a blog all of their own…but don’t forget, if you are thinking about restructuring or topping up your pension, the annual contribution limit is reducing from £50,000 to £40,000.
If any of the above has piqued your interest, do not hesitate to contact us at email@example.com or on 01761 241 861. Please take detailed advice before acting on this or any budget coverage.