The budget will be presented by the Chancellor on Wednesday 19th March and the new tax year begins on 6 April. There are a few things the we already know will change from April… and a few more we’d like to hope for:
Increased Personal Allowance
The income tax free personal allowance for individuals will increase to £10,000 from £9,440 – this is the amount of your income which is tax free in a given year.
Reduced Corporation Tax Rate
The rate for large companies – those with profits of £1.5m or more will reduce to 21%. The rate for small businesses is unchanged, at 20%.
Tax free amounts will be limited to £40,000 per year and £1.25m in a lifetime, reduced from £1.5m
National Insurance Employment Allowance
All businesses will receive a £2,000 allowance against their employer’s NI bill. This will mean that, even one person limited companies will benefit, by being able to pay themselves virtually up to the full personal allowance in salary, without incurring national insurance.
Business Rates Relief
Has been extended for small businesses for another year from April 2014 and food and drink retailers will qualify for a further discount.
The period of time after which a property ceases to be your primary place of residence but during which you still do not have to pay any Capital Gains Tax if you sell the property, is reduced from 3 years to 18 months. This will affect those with recently purchased second homes or holiday properties who are looking to sell one of their residences.
What we’d like to see…
Measures to help small businesses and employers – such as reducing employer’s national insurance or business rates, clarity on self-employment legislation, or rural broadband schemes
Measures to stimulate exports and manufacturing – such as grants for those selling overseas and a formal extension to the annual investment allowance
Anything to stimulate lending to small businesses – which still continues to contract in 2014 and prevents them from investing!!!