BUDGET 18 MARCH 2015 – KEY POINTS

BUDGET 18 MARCH 2015 – KEY POINTS

Below is a summary of George Osborne’s 2015 budget, who promised a “No giveaways, no gimmicks” budget.

Income tax

The tax-free personal allowance to rise from £10,600 in 2015-6 to £10,800 in 2016-7 and £11,000 in 2017-8.

The threshold at which people start paying 40p income tax to rise by above inflation from £42,385 in 2014-5 to £43,300 in 2017-8.

ISA’s

Annual savings limit for ISA increased to £15,240.

A new “Help to buy” ISA for first-time buyers. For every £200 a first-time buyer saves for a deposit, the government will top up with another £50.

More flexible ISAs – Money can be taken in and out of ISAs from this autumn without savers losing their tax-free allowance.

Savings

Personal savings allowance – the first £1,000 interest on savings income will be tax-free for basic rate taxpayers.

Pensions

Pension pot lifetime allowance to be reduced from £1.25m to £1m from next year.

Pensioners allowed to access their annuities, with 55% tax charge abolished and tax applied at the marginal rate
Minimum Wage.

National Minimum Wage will rise by 20p an hour to £6.70 from October.

Businesses

Corporation tax to be cut to 20% from April 2015.

Legislation next week on diverted profits tax aimed at multinationals shifting profits offshore, with policy to take effect at the start of April.

Bank levy increased to 0.21%, raising an additional £900m a year.

National Insurance

Class 2 National Insurance contributions for the self-employed to be abolished entirely in the next parliament.

Employers’ National Insurance contributions for under 21’s to be abolished from this April, and for young apprentices from April 2016.

Tax Returns

End-of-year paper tax returns will be scrapped in favour of “real-time” digital tax online accounts by 2020.

Alcohol duty

A tax cut 1p cut on a pint and 2% cut on the duty of spirits and cider. Wine duty frozen.

Tobacco and Gambling duty

Tobacco and gambling taxes to remain unchanged.

New “horse racing betting right”.

Fuel Duty

Fuel duty will remain frozen.

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