Budget Summary – Spring 2015

With 50 days to go until the general election, the Chancellor stated that “Britain is walking tall again”. He backed this up by saying there are more jobs in Britain than ever before and that if the economy continues to grow until 2018, the UK will be in a surplus for the first time in 18 years.

Mr. Osbourne reiterates that his most recent Budget supports those who want to work and get on, whilst continuing to support those vulnerable in society. Within this Budget, the government is:

  • Increasing the tax free personal allowance to £10,600 from 6 April 2015 with a further increase to £11,000 by 2017/18.
  • The higher rate bands will also be increasing marginally to £42,700 in 2016/17.
  • Allowing married couples to transfer any unused Personal Allowance to their spouse, up to a maximum of £1,100. This relief is not available for higher rate tax payers.
  • Rewarding savers with a new Personal Savings Allowance, so that the first £1,000 of savings income is tax free for basic rate tax payers, and the first £500 for higher rate tax payers.
  • Introducing a new Help to Buy ISA that will support those saving to buy their first home. For every £200 saved by the individual, the government will add £50. This is up to a maximum government bonus of £3,000.
  • Restricting the lifetime allowance for pension’s tax relief to £1 million from April 2016.
  • Continuing to take firm action to tackle tax evasion and avoidance by introducing tougher sanctions for tax evaders, tax avoiders and those who facilitate and promote avoidance.

The 2015 Budget announces that the government will transform the tax system over the next parliament by introducing digital tax accounts, removing the need for the annual tax return. Mr Osbourne plans to make tax ‘easier’ and as a first step, the government will:

  •  Introduce digital tax accounts for all 5 million small businesses and the first 10 million individuals by early 2016.
  •  Abolish Class 2 NIC’s in the next Parliament and reform Class 4 NIC’s.
  • Reduce the rate of Class 1 Secondary NIC’s to nil for employing under 21’s.
  • Reduce the main rate of corporation tax down to 20% from 1 April 2015.