Posted by Nick Day on 19 Mar 2015
2015 Budget Summary
Many of the provisions announced in Wednesday’s 2015 Budget have previously been trailed by the Treasury, for example via the autumn statement. The main highlights from what proved to be an unexciting Budget are summarised below.
2015 Budget Changes for Personal Tax
The Personal Allowance will increase again over the coming years to £10,600 for 2015/16, to £10,800 for 2016/17 and £11,000 for 2017/18. The basic rate band will be increased and the benefit will be passed on to higher rate taxpayers, which has not been the case in the recent past.
The Marriage Allowance will also increase modestly and a new Personal Savings Allowance will be introduced in the 2016/17 year to effectively exempt from tax the first £1,000 of savings interest although only the first £500 will be exempt for 40% taxpayers and 45% taxpayers will get no exemption.
“Help to Buy ISAs” will be introduced, whereby for every £200 saved towards a new home, a saver will receive £50 per month from the Government, up to an overall limit of £3,000.
Digital tax accounts with HMRC should enable taxpayers with relatively simple affairs to avoid filing annual Self Assessment tax returns in the future.
2015 Budget Changes to Pensions
The Lifetime Allowance (overall limit on size of UK registered pension pots) will reduce to £1 million from April 2016 but there will be transitional protection for pension funds already worth over £1 million.
Those who have bought/receive annuities will be able to sell them without suffering the current 55% tax charge from April 2016 onwards. Tax will be charged at the individual’s marginal tax rate instead.
2015 Budget Changes for Expatriates
It was confirmed that the disposal by a non-resident of UK residential property will be subject to the UK capital gains tax rules from April 2015 onwards.
For non-domiciled individuals resident in the UK that claim the remittance basis of taxation, it was confirmed that the Remittance Basis Charge will increase from April 2015 to £60,000 for those resident in the UK for 12 out of the 14 previous tax years and to £90,000 for those resident in 17 of the 20 previous tax years.
2015 Budget Changes to Inheritance Tax
It was announced that there will be a review of the use of deeds of variation for tax planning purposes, in what one assumes is a dig at the affairs of the Milibands!
2015 Budget Changes to National Insurance
The Government intends to abolish Class 2 NIC and introduce a contributory element to Class 4 NIC paid by self-employed people.
2015 Budget Changes to VAT
The VAT registration threshold increases to £82,000 from 1 April 2015.
2015 Budget Changes to Corporation Tax
The main rate of Corporation Tax will be 20% from April 2015.
The Government will continue its crackdown on “tax avoiders” – those that persistently enter into tax avoidance schemes that fail – and will seek to publish their names.
Those evading tax by putting assets offshore will be hunted down. Existing disclosure facilities via the Liechtenstein Disclosure Facility (LDF) will be closed sooner than expected and a less favourable facility will be available from 2016 that will lead to 30% + penalties and no immunity from prosecution.
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