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The 27 most important points to take from the 2015 Budget Statement

by Scott Brown | Mar 25, 2015
  • Kevin Beare & Co, a part of Sable Group, has provided us with a list of the key announcements from Chancellor George Osborne’s UK Budget Statement. Here we detail the 27 most important points to take from the speech.
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    Business

    Corporation tax

    • The main rate for corporation tax will be cut to 20% from April 2015.

    National insurance

    • Businesses will no longer have to pay National Insurance Contributions (NICs) for employees under the age of 21 from April 2015. It will also be abolished for apprentices under 25 from April 2016.
    • The government will abolish Class 2 NICs in the next parliament and reform Class 4 NICs to introduce a new contributory benefit test. Consultation on the proposal and timing of the reforms will occur later in 2015.

    Business rates

    • Small business rate relief will be extended until April 2016. Inflation-linked increases to business rates will be capped at 2% until April 2016.

    VAT registration and deregistration thresholds

    • The taxable turnover threshold, which requires a person to register for VAT, will be increased from £81,000 to £82,000 per year from 1 April 2015.
    • The threshold below which a VAT-registered person may apply to deregister will be increased from £79,000 to £80,000 per year.
    • The relevant registration and deregistration threshold for intra-Community acquisitions will also be increased from £81,000 to £82,000 per year.

    Deduction of VAT relating to foreign branches

    • A new measure will mean that businesses that manufacture supplies outside of the UK can no longer take into account the activities of their foreign branches when calculating how much input tax they can claim.

    Entrepreneurs’ relief

    • Entrepreneurs’ relief will only be available to those selling genuine stakes in businesses.

    Research and development

    • As previously announced in the 2014 Autumn Statement, the government will increase the above the line credit from 10% to 11% and the rate of the SME scheme from 225% to 230%. Qualifying expenditure will be restricted for Research and & Development (R&D) tax credits so that materials incorporated in products that are sold are not eligible. These measures will take effect from 1 April 2015.
    • To improve the access to R&D tax credits for smaller companies, the government will introduce voluntary advanced assurances lasting three years for smaller businesses making a first claim from autumn 2015; it will also reduce the time taken to process a claim from 2016 onwards.

    Personal

    Income tax

    • For individuals, the income tax personal allowance will increase to £10,600 with effect from 6 April 2015. It will further increase to £10,800 from 6 April 2016 and to £11,000 from 6 April 2017.
    • The basic rate band will decrease from £31,865 in 2014/15 to £31,785 in 2015/16. This means that the higher rate threshold, above which individuals pay up to 40% income tax, will increase from £41,865 to £42,385.

    Personal savings allowance

    • A new tax-free allowance will be introduced for the interest basic rate taxpayers earn on savings up to £1,000, and up to £500 for higher rate taxpayers from 6 April 2016. However, additional rate taxpayers will not receive an allowance.

    Individual Savings Accounts (ISAs)

    • The ISA threshold increases from £15,000 to £15,240.
    • More flexible ISAs will allow people to take money out of their account and return it in the same year without losing any of their annual tax-free entitlement.
    • The Help to Buy ISA for first-time buyers will provide a government bonus of £50 for every £200 a first time buyer saves, up to a maximum of £3,000 for those who save up to £12,000 for a deposit to purchase their first home.

    Pensions: Lifetime allowance

    • The current lifetime allowance of £1.25 million will reduce to £1 million from 6 April 2016. Transitional protection for pension rights already over £1 million will be introduced at the same time to ensure the change is not retrospective.

    Non domiciles: increasing the remittance basis charge

    • As announced at the 2014 Autumn Statement, legislation will be introduced in the 2015 Finance Bill making changes to the charges paid by non-domiciled individuals resident in the UK who wish to claim the remittance basis of taxation.
    • From April 2015, a new annual charge of £90,000 will be introduced for individuals who have been resident in the UK for at least 17 of the last 20 years. The charge paid by individuals who have been resident in the UK for at least 12 of the last 14 years will increase from £50,000 to £60,000.

    Non-UK residents disposing of UK residential property

    • From 6 April 2015 non-UK resident individuals, trusts, personal representatives and narrowly controlled companies will be subject to Capital Gains Tax on gains accruing on the disposal of UK residential property on or after that date. Non-residents will be subject to tax at the same rates as UK taxpayers (28% or 18%) on gains above the annual exempt amount. Non-resident companies will be subject to tax at the same rates as UK companies (20%) and will have access to an indexation allowance.

    Minimum Wage

    • The minimum wage will rise to £6.70 in the autumn, with the apprentice rate increasing to £3.30.

    Income tax: van benefit

    • As previously announced, the van benefit charge for zero emission vans has been increased from £0 to 20% of the van benefit charge for vans that omit CO2 in 2015/16. This will further increase to 40% of the van benefit charge for 2016/17, 60% for 2017/18, 80% for 2018/19 and 90% for 2019/20. There will be a single van benefit charge applying to all vans from 2020/21.

    Gift aid small donations scheme (GASDS)

    • With effect from April 2016, secondary legislation will be introduced to allow charities and community amateur sports clubs to increase the maximum annual donation amount that can be claimed through the GASDS to £8,000.

    Other announcements

    Tax simplification: the end of the tax return

    • The tax system will be transformed over the next parliament by introducing digital tax accounts to remove the need for individuals and small businesses to complete annual tax returns. Further details on the policy and administrative changes needed to deliver this will be published later in 2015.

    Fuel duty

    • The fuel duty increase that had previously been scheduled to come into effect in September 2015 has been cancelled.

    Alcohol duties

    • Beer duty will be cut by 1 pence, while cider and spirit duties will be reduced by 2%.

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