2014 Budget – what it means for you

By Stuart 4 years agoNo Comments

The Chancellor has just delivered his latest budget. The news was delivered in the context that George Osborne does not believe faster growth alone will balance the books, which means that it looks like austerity will continue until 2018/2019 (when the budget deficit has been reduced to nil)
The budget has highlighted some significant changes for savers and some encouragement for business investment. Here are the highlights from a small business perspective:

  • With effect from 6th April a new £2000 employment allowance comes into force. This means that all employers won’t pay the first £2,000 of employers NIC previously due. This is great news for all employers
  • The main rate of corporation tax will be reduced to 21% and then down to 20% next year (for companies making profits of more than £300,000). The smaller company rate of corporation tax stays the same at 20%
  • The annual investment allowance has been doubled to £500,000 extended to end of 2015. This means you can spend up to £0.5m on new capital equipment for your business each year and get full tax relief immediately. Sounds great as a headline, but I wonder exactly how many small companies this will really help?
  • If you are a loss making company investing in research and development, there’s some good news on R&D tax credits which have been increased to 14%
  • If you are a sole trader, your Class 2 NIC’s are to be collected via self assessment tax returns, rather than the current direct debit system. Could be a sensible move, but don’t forget you’ll need to save up to pay the bill in one go.
  • The higher rate tax allowance has been increased to 41,860 from 41,450. A small increase, but every little helps!
  • There’s a big change in ISA limits, which have been increased to £15,000. Cash & Shares ISA’s will be combined from July and will be much more flexible. The Junior ISA limit is increased up to £4,000
  • The biggest change for pensioners is that they won’t be forced to buy an annuity with their pension money. They’ll be able to do with it as they please. We’ll need to see the detail on how this pans out, but it’s got to make investing in a pension more attractive now.
  • The 10p tax rate on savings is to be abolished
Categories:
  General BusinessProfit ImprovementTax Tips
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