Last week George Osborne delivered the Government's pre-election budget. Below is the Financial Management Centre’s summary of key highlights contained in the budget:

  • The Personal Allowance (your income you are able to earn before you begin to pay tax) – will increase to £10,600 next month from its current position of £10,000. This will increase further to £10,800 and £11,000 over the next two years
  • From April 2015 workers will begin to start paying 40% tax when they earn over £42,385 a year, up by £520 from the current £41,865 threshold. This will increase to £43,300 in 2017/18
  • The transferable tax allowance for married couples and civil partners is set at £1,060 for 2015/16.
  • Corporation tax will be cut by 1% from April 2015 bringing it down to a rate of 20%.  Since most small businesses currently pay 20% corporation in any event this change will have no impact on most of our clients.
  • Basic rate savers won’t have to pay tax on the first £1,000 of interest they receive; this is reduced to £500 for higher rate payers
  • The taxable turnover threshold, which requires a person to register for VAT, will be increased from £81,000 to £82,000 per year from 1 April 2015. The threshold below which a VAT-registered person may apply to deregister will be increased from £79,000 to £80,000
  • The minimum wage will rise to £6.70 in the autumn, with the apprentice rate increasing to £3.30
  • Businesses will no longer have to pay NICs for employees under-21 from April 2015. They will also be abolished for apprentices under 25 from April 2016
  • A new Help to Buy ISA for first time buyers will provide a government bonus of £50 for every £200 saved, up to a maximum of £3,000 for those who save up to £12,000 for a deposit to purchase their first home.
  • The fuel duty increase due on 1 September 2015 is cancelled
  • The Government will abolish Class 2 National Insurance as well as reform Class 4 in the next parliament.
  • Under the Construction Industry Scheme contractors who have not made any payments to HMRC during a particular tax month will no longer be required to send in a return to HMRC.
  • 1p is shaved off the price of a pint of beer.  This is the third consecutive year this has happened and will surely be welcomed by our customers in the pub, restaurant and hotel sectors.
  • Duty on cider, scotch whiskey and spirits was cut by 2%, whist the duty on wine was frozen.
  • Rolling tobacco duty was frozen.  Loose tobacco and cigarettes taxation has been increased by 2% above inflation.