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Micheal Cope, Tax Partner at Duncan & Toplis

George Osborne’s Budget: Reaction from Duncan & Toplis

The Chancellor George Osborne today presented his Budget to Parliament. Michael Cope, Tax Partner at Duncan & Toplis, takes a look at the Chancellor’s announcements and the effect it is expected to have on businesses and individuals.

The Chancellor acknowledged the impact that low interest rates have had on savers, saying: “Many pensioners have seen their incomes fall as a consequence of the low interest rates that Britain has deliberately pursued to support the economy. It’s time Britain helped them out in return.”

Support for savers, either current or future, was certainly amongst the most noticable measures announced today.

Savings and pensions
The New ISA effectively merges cash and shares ISAs, with the annual ISA tax-free savings limit increasing to £15,000 effective from 1st July 2014. Transfers from stocks and shares ISAs to cash will be allowed.

The annual limits for Child Trust Funds and Junior ISAs will be increased to £4,000 from 1 July 2014.

The current 10% starting tax rate for savings income below £2,790 is to be reduced to 0% for the first £2,880 effective from 6th April 2014, and £5,000 from 6th April 2015.
The cap for investing in Premium Bonds will increase to £40,000 from 1st June 2014, with a further increase to take the investment limit up to £50,000 post 5 April 2015.

January 2015 will see the introduction of a new National Savings Pensioner Bond, which will guarantee a “market-leading” rate of interest for investments of up to £10,000 per bond.

There will be increased flexibility surrounding pensions with the requirement to buy an annuity being removed. From 27th March 2014 the Government will allow people with a defined contribution pension pot to access an income up to 150% of an equivalent annuity (previously 120%). They will also have access to flexible draw-down if they have guaranteed income of £12,000 (reduced from £20,000) to exceed the above limit.

Rates and allowances
The tax free personal allowance will increase to £10,000 from April 2014 and £10,500 from April 2015. The threshold from which higher rate tax is payable will increase to £41,865 from April 2014 and to £42,285 from April 2015.

The new transferable tax allowance for married couples and civil partners, £1,000, from April 2014, will reflect the increase in the personal allowance and will rise to £1,050 from April 2015.

Business tax
The Annual Investment Allowance for capital allowances will increase to £500,000, effective from April 2014 and will remain at that level until 31st December 2015.
For the self-employed there will be a change to the collection of Class 2 National Insurance Contributions: from April 2016 these will be payable via the self-assessment system.

Anti-avoidance
The Finance Bill 2014 will introduce legislation to accelerate payment of tax by users of schemes that have been disclosed under the tax avoidance rules. In such cases the amount in dispute will need to be paid over to HM Revenue & Customs and held by them until the dispute is resolved. This extends the announcement in the 2013 Autumn Statement that taxpayers using avoidance schemes would need to pay disputed amounts to HMRC on demand where a similar scheme has been defeated in the courts.

Notes to editors:

Duncan & Toplis was established in 1925 and has since grown into one of the largest independent firms of chartered accountants in the Midlands.
• Duncan & Toplis offers a wide range of services to small, medium and large-sized family businesses, from accountancy, audit and tax to payroll, human resources and computer services.
• The business employs around 300 staff, of whom 85 are currently engaged in professional training.
• Duncan & Toplis is listed in the top 30 UK accountancy practices in Accountancy magazine.

For media information please contact:
Jez Ashberry
Shooting Star PR
01522 528540
07780 735071
jez@weareshootingstar.co.uk
@jezashberry


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