Budget 2014 – Key announcements
Income Tax and national insurance contributions (NICs)
Income tax rates will remain unaltered for the tax year 2014/15, but as previously announced:
- The personal allowance will increase to £10,000 from 6 April 2014 (currently £9,440 for the tax year 2013-14)
- From 6 April 2015 the personal allowance will increase to £10,500
- Also, from 6 April 2014, the limit for the basic rate will be reduced to £31,865 (from £32,010) with the higher rate threshold increasing to £41,865 (from £41,450)
- A further increase to £42,285 from 2015
The transferable tax allowance rate will link to the personal allowance from the tax year 2015/16 for married couples and civil partners increasing to £1,050.
NIC rates will remain unaltered for the tax year 2014/15
- The primary threshold will increase to £7,956 from 6 April 2014 (currently £7,755 for the tax year 2013/14)
- From 6 April 2014 the upper earnings limit will increase to £41,865 in line with the higher rate threshold for income tax
Announced previously, from 6 April 2014 all businesses and charities will be eligible for a new £2,000 Employment Allowance to reduce their employer NIC liability.
Capital gains tax (CGT)
The CGT annual allowance for the tax year 2014/15 will increase to £11,000 (currently £10,900 for the tax year 2013/14) with CGT rates unchanged.
The New ISA (NISA)
Good news for share plan savers, the government have announced the introduction of the NISA, merging the current cash and stocks and shares ISA into one and increasing the annual limit by £3,480 to £15,000.
From 1 July 2014 savers will have the option to save all their NISA allowance in either a cash or stocks and shares ISA, or a variation of both, enabling maturing share plan accounts to maximise their tax saving opportunities.
Factsheets on the key announcements can be found by visiting the HMRC Website.
If you have any questions please do not hesitate to contact me.
Louise Drake | National Sales Manager | 01274 263101