The Budget 2014: 3 Minute Guide

20 Mar The Budget 2014: 3 Minute Guide

The below has been provided courtesy of money.co.uk

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SaversISAs

• ISA allowance increases to £15,000 on 1st July.
• Create a single new ISA (NISA) for cash and investments.
• Flexibility to choose how to split your money between savings and investments within the overall limit.
• Transfer all your current ISAs from stocks and shares to cash and back again.
• Junior ISA and Child Trust Fund allowance will increase to £4,000 a year on 1st July.
• ISA eligibility extended to P2P loans and a consultation on extending ISAs to debt securities offered by crowdfunding platforms.
• Restrictions around maturity dates of securities held within ISAs removed.

Pensioner bonds

• New ‘market leading’ savings bonds available from next January.
• Run by NS&I they’ll be on offer to savers aged 65 and over.
• Rates TBC but likely to be 2.8% gross/AER on a 1 year bond and 4% gross/AER on 3 year bond.
• Save up to £10,000 in each bond with 1 million available (up to a £10bn issue).

10p rate for savers abolished

• 10p savings tax rate scrapped from April 2015.
• No tax on first £5,000 of savings income.
• Currently applies to first £2,790 of savings income above the personal allowance.

Premium bonds

• Investment cap will rise from £30,000 to £40,000 in June, then to £50,000 in 2015/16.
• Two £1 million prizes on offer each month from August.

TaxPersonal Allowance

• Increases to £10,000 from April.
• Extra £500 increase to £10,500 from April 2015.
• The 40% higher rate tax threshold will rise to £41,865 in April then by 1% to £42,285 in 2015/16.
• Personal allowance to increase by CPI from 2016/17.

Married Couples Tax Allowance

• Transfer up to £1,050 of unused personal allowance to your husband, wife or civil partner.
• Available from 2015/16 it will be set at 10% of personal allowance each tax year.
• Higher rate and additional rate taxpayers are exempt.

Inheritance Tax

• Frozen at £325,000 until 2017/18.
• Consultation on extending the exemption of IHT liability for members of the emergency services who lose their life on active duty or through injuries sustained.

Other Tax

• Incentives for local authorities to freeze council tax again this year.
• Bingo halls to have duty halved to 10%.
• The fuel duty increase scheduled for September has been scrapped.

HousingNew Builds

• 0.5bn finance to small house building firms.
• £150m finance for people who want to build their own homes.
• Help2Buy equity loan scheme extended until 2020.
• New ‘garden city’ in Ebbsfleet, Kent with 150,000 new homes.
• Totalling 200,000 new homes for families.

Other Housing

• £15 saving on energy bills a year by cutting costs for business .
• Prices not expected to exceed pre-crash peak in real terms until 2018
• Support for Mortgage Interest Scheme extended on its £200,000/13 week wait period terms until 2016
• 15% stamp duty for residential property purchased through a ‘corporate envelope’ and worth over £500k

TransportAir & Road

• £200m that Local Authorities can bid for to repair potholes.
• £140m for repairs and maintenance for damaged flood defences.
• Air Transport Duty on flights over 4,000 miles+ will be cut so it’ll be cheaper to fly long haul.
• Start up support to increase flights from regional airports.
• Increase in tax on fuel for private jets.

ChildcareTax Free Childcare Scheme

• Available to households with children under 12 and those with disabilities under 16 from Autumn 2015.
• Government will contribute 20p for every 80p you pay in.
• Worth up to £2,000 per child each year on up to £10,000 of registered childcare.
• Parents need to work and earn over £50 a week but less than £150,000 a year.
• Self-employed parents can use the scheme and won’t have to meet the £50/week minimum for a start up period.
• Managed through an online account so no need for employers to get involved.
• Can’t be used with Childcare vouchers, these will be phased out but you can choose to keep using them.

Other Childcare

• Government to cover up to 85% of childcare costs for parents that receive Universal Credit and pay income tax.
• Extra funding for free early education for 3 and 4 year olds and 20% of 2 year olds (40% from September).

PensionsDefined Contribution Pensions from 27th March

• Small pensions worth up to £10,000 can be taken as a lump sum (the current max. is £2,000).
• Option to take up to 3 small pension pots as a lump sum.
• Increase the overall amount of pension savings you can have to take a taxed lump sum from £18,000 to £30,000.
• Capped drawdown limit increased to 150% of the equivalent annuity, from 120%.
• Option to access pension savings flexibly with £12,000 guaranteed pension income (down from £20,000).

Pension reform: April 2015

• You will no longer have to buy an annuity, it’ll be your choice.
• Freedom to draw down as much or as little of your pension pot as and when you like.
• Take a ¼ of your pension pot tax free and anything else you take out is taxed at normal income tax rate (down from 55% for full withdrawal on retirement).
• Free impartial face-to-face advice on how to get most from your pension for all retirees.

NI Top Up

• Voluntary NI contributions to allow pensioners to top up their Additional State Pension.
• 18 month window to top up from October 2015 until April 2016.
• Available to everyone reaching State Pension age before 6th April, 2016.
• Worth an extra £25 a week at most; the buy-in rates are yet to be confirmed.

Alcohol & Tobacco

• 2% above inflation rise in tobacco duty extended for the rest of the next parliament.
• Alcohol duty escalator scrapped and duty will rise will inflation with some exceptions…
• Duty on Scottish whisky and ordinary cider will be frozen.
• Beer duty to be cut by 1p/l (equal to a penny off a pint).

Read more: https://www.money.co.uk/article/1010290-the-budget-2014-3-minute-guide.htm#ixzz2wV7ndGh6