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John M Taylor & Co | Accountants Paisley/Taxation/Vat Returns/Business Start Ups/Sage/Payroll/Bookkeeping

Budget 2014

We are delighted to announce the publication of our in depth analysis of the Chancellor's Budget announcement for the 2014/15 fiscal year.  This can be downloaded by clicking here

There was little in the way of surprises in the budget speech with most of the measures already being announced in the Autumn Statement in December 2013 or in the budget statement in March 2013 but the main winners were savers and pensioners who, having suffered over the last few years due to the low interest rates, were prime candidates for some good news given that there is an election on the horizon in 2015. 

Some of the key points to arise from George Osborne's budget speech were as follows:

  • The tax free personal allowance increases to £10,000 from 6 April 2014 as originally announced and again to £10,500 in 2015.
  • The threshold at which the 40% tax rate applies will increase to £41,865 from 6 April 2014 and again to £42,285 in 2015.
  • ISAs will be replaced with NISAs from July 2014 and the separate cash and stocks/shares components will be merged into a single pot.  The subscription limit for NISAs will be £15,000 per annum.
  • For businesses, the annual investment allowance, originally intended to reduce to £25,000 per annum from 1 January 2015 will now be doubled from the existing £250,000 to £500,000 per annum (from 1 April 2014 for companies and 6 April 2014 for unincorporated businesses) and will run for a further year to 31 December 2015. 

Perhaps the biggest surprise of the Chancellor’s speech relates to the overhaul of the rules regarding the drawdown of pension benefits.  Various thresholds and limits are being increased from 27 March 2014 but in addition the requirement to purchase an annuity will be removed altogether from April 2015.  This means that in future pensioners can potentially drawdown their entire pension pot in a lump sum with the drawdown being taxed at their marginal tax rates rather than the current punitive 55% rate.  This will bring a high level of flexibility to defined contributions pension schemes which is good news for most people. 

As always the devil will be in the detail, especially in relation to the pension changes, but there was little in the headline announcements yesterday to cause concern for most individual taxpayers or businesses.  If you have picked up anything in the Budget coverage that you would like to explore further then by all means give us a call and we shall be happy to discuss the relevant points with you. 

Link:  JMT Budget Briefing  Gov.Uk Budget Site

Posted - 20/03/2014

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