What does the 2015 Budget provide for businesses in the Black Country?
2015 finds the Chancellor caught between helping the government challenge for re-election and maintaining a tight grip on public expenditure. As a result there are some head-line grabbers in his announcements but not the level of “give-aways” of previous pre-election Budgets.
Here’s a summary of the main points (Check out the gov.uk site for more detail).
- Many of us will feel a little better off as the personal tax allowance is raised by £600 to £10,600 pa this year and by a further £200 in 2016-17 and 2017-18. At the same time the basic rate tax limit will go up to £31,900 in 2016-17.
- If you are a saver then you may be cheered by the introduction of a tax free savings band to include the first £1,000 of interest if you pay tax at 20% and the first £500 of interest if you are a 40% tax payer. If you are an ISA user then the new “Flexible ISA” rule could be of interest. The “Flexible ISA” means that you can remove some or all of you ISA savings allowance in a tax year and put it back later in the tax year without losing the allowance.
- Minimum wage for adults goes up to £6.70 in October. The rate for 18-20 year olds rises to £5.30 and for apprentices it goes up to £3.30 per hour (a 20% increase).
- Class 2 NICs for the self-employed are ear-marked for abolition (if the current government wins the election) in a move that will simplify the administration of NIC for people on lower income. Details on how the NI system will operate in future have not been announced in full as yet.
- The lifetime-contribution limit for private pensions will be reduced from £1.25m to £1m from April next, although the annual-contribution limit will be kept at the current £40,000.
- Companies with an annual turnover of more than £10m may need to take note of a “diverted profits tax”. This will be introduced to prevent “contrived” arrangements of company structure (e.g. headquartering in Ireland) being used to avoid corporation tax.
- Business rates are set to be reviewed in move that may reduce the emphasis on property and perhaps level the playing field for retailers competition against eCommerce giants.
- To keep you ahead in the digital world there will be an investment of up to £600 million in mobile networks, and an ambition that nearly all (our italics) UK premises should achieve a broadband connection speed of at least 100 megabits per second.
- The Chancellor announced the end of the annual tax return. The introduction of RTI (Real Time Information) means that HMRC will be able to collate people’s tax affairs into a single digital account. The measures won’t be ready until 2010 at the earliest and although this should simplify the recording and reporting process we aren’t predicting the end of the road for our services just yet!
Lewis Smith & Co. will publish reminders about when you need to update payroll systems later this year. We’ll also keep tabs on the details behind some of these announcements as and when they are made – of course there is also the little matter of an election coming up that could change everything.
Just give us a call on 01384 235549 today if you want to discuss the impact of any of the Budget measures on your business or email firstname.lastname@example.org
Lewis Smith & Co. – Accountants for Quarry Bank businesses.
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