This week saw George Osborne deliver his 2014 budget speech which in his own words was a budget for those who are ‘a maker, a doer or a saver’. So what exactly does the latest budget mean for the UK public?
One of changes to come into effect is the widely anticipated increase in the personal allowance. As of 6 April 2014, this was set to rise from the current rate of £9,440 to £10,000. The government announced a further increase of the personal allowance to £10,500 coming into effect from April 2015. The overall tax effect of the increases in the personal allowances is an increase in income of £112 and £100 for the 2014/15 and 2015/16 tax years respectively.
Additionally, HMRC plan to target the Individuals Savings Accounts (ISAs) which offer tax free interest and dividends to those who invest in an ISA. Rather than having two separate accounts (a cash ISA and stock ISA), the proposed changes from 2015 would be to lump this into a new style of ISA which each individual would be eligible to invest a maximum of £15,000 per annum.
The other major change would be the effect on pensions. The proposed changes are to affect those who wish to withdraw from their pensions at retirement. Rather than restricting what an individual can take from their pension, as of April 2015, every individual will have the option to:
- Make a full withdrawal (taxed at the marginal rate)
- Take the pension as an annuity
- Drawdown / other products.
(Note: these are just a few of the changes mentioned in the 2014 budget. For a full report on the budget, please visit
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/293759/37630_Budget_2014_Web_Accessible.pdf).
If you would like more information about how these changes may affect your current tax position then please feel free to contact us on 020 8952 0140 or email
[email protected] where a tax specialist will be more than happy to assist.
Additionally, HMRC plan to target the Individuals Savings Accounts (ISAs) which offer tax free interest and dividends to those who invest in an ISA. Rather than having two separate accounts (a cash ISA and stock ISA), the proposed changes from 2015 would be to lump this into a new style of ISA which each individual would be eligible to invest a maximum of £15,000 per annum.
The other major change would be the effect on pensions. The proposed changes are to affect those who wish to withdraw from their pensions at retirement. Rather than restricting what an individual can take from their pension, as of April 2015, every individual will have the option to: