With new flexible ISA's, a help to buy ISA and tax free savings, the 2015 budget will have pleased the nations savers. We've summarised the main points from today's budget for you.
Savings and Pensions
The pensions Lifetime Allowance will be cut from £1.25m to £1m.
Savers won’t have to pay any tax on interest on the first £1,000 of interest (£500 for higher rate tax payers).
A new Help to Buy ISA will be introduced for first time buyers. For every £200 saved, The Government will top up with an additional £50.
Traditional ISA’s are to be made more flexible.
Personal Taxes and National Insurance
The tax free allowance will rise to £10,800 (2016/17) next year and £11,000 (2017/18) the year after.
The rate at which taxpayers pay 40% tax will increase to £43,300 by 2017/2018.
The National Minimum Wage will rise by 20p an hour to £6.70 from October 2015 (for non-apprentices over 21).
Employers National Insurance Contributions for Under 21’s to be abolished from April 2015 and for young apprentices from April 2016.
Class 2 National Insurance Contributions for the self-employed are to be abolished entirely in the next parliament.
Corporation Tax (No change)
Profits < £300,000 – 20%
Profits > £300,000 – 20% (From 1 April 2015)
Registration and De-registration limits: increased to £82,000 and £80,000 respectively from 1 April 2015.
Use of post death Deeds of Variation to avoid Inheritance Tax is to be reviewed.
Farmers will be allowed to average their incomes for tax purposes over five years (increased from 2 years).
Changes will be introduced to abolish paper Tax Returns with a move to a more digital real time submission of tax information. Further details are still to be published.
The government will consult over the summer on a new payment process to enable tax and NICs to be collected through digital accounts, instead of self assessment. Again further details are still to be published.
As always, the devil will be in the detail and it should be borne in mind that with this being an election year, we could be faced with further budgets and possible changes to the above (in the last election year, 2010, there were 3 separate budget announcements).
We will of course issue further notices of any significant announcements.