Summary of Budget Speech 2015
The Chancellor started with his opinion of how “Britain is Walking Tall”. Economy growing faster than any other major country and number of people working at an all-time high with claims at a long term 40 year low.
Pre-Election buzz words are that the Government have a plan and it’s working and that it needs to be stuck to. From austerity to prosperity. Out of the red and into the black. Britain on right track, we must not turn back.
Growth forecasts up to 2.5%. Chancellor keen to highlight that the North is part of this with Yorkshire the biggest winner. Living standards higher than at 2010.
National Minimum Wage up 20p to £6.70. On target to be £8 by end of the decade.
Inflation forecast down to 0.2% due to falling oil & food prices.
Farmers to be able to average income for tax purposes over 5 years.
New £1 coin to be based on the design of a 15 year school boy.
£13bn to be raised from sale of Northern Rock and Bradford Bingley mortgage books and further sales of bank shares. Irresponsible to treat this as a windfall just because an election is coming up. Paying down national debt is more important. National debt target hit.
Public services performing and satisfaction with NHS up. Crime down. Outstanding Schools.
Tax avoidance to be tackled.
The rich are paying the most. Top 1% earners pay over 25% of all tax and this will rise to 27%.
Pension relief to fall. From £ 1.2m to £1m lifetime pension allowance.
Legislate against multi nationals pushing profits offshore.
Entrepreneurs relief to be amended.
The opposition will no doubt have differing views to The Chancellor judging by the noise in the House. Especially after the number of times the Leader of the Opposition’s 2 kitchens were mentioned!
In respect of recruitment agencies and umbrella companies The Chancellor said he "Will stop employment intermediaries exploiting the tax system to reduce their own costs by clamping down on the agencies and umbrella companies who abuse tax relief on travel and subsistence while we will protect those genuinely self-employed".
This appears to be in response to the large number of construction workers who were switched from the Construction Industry Scheme and who then were worse off as a result of additional national insurance costs.
Hopefully it means that genuine contractors and freelancers who travel the length and breadth of Britain to deliver their services will still get the relief they deserve for doing so. No mention on what this means for contractors working through their own limited companies.
It could also imply a clampdown on EDM (Elective Deduction Models) and Hybrid Schemes which most compliant umbrella companies don’t operate.
The key changes announced:
Corporation Tax to be 20% from April.
Personal allowance increasing from £10,600 in 2015-2016 to £10,800 in 2016-20177 and then £11,000 in 2017-2018.
Annual Tax return to be abolished and information to be uploaded automatically. Class 2 NIC’s for self-employed to be abolished.
Fuel duty increase that was scheduled for September has been cancelled.
Tobacco duty unchanged.
Beer, Cider and Spirits duty down. Wine duty frozen.
First £1,000 of bank interest will be tax free.
More flexible ISA to be introduced allowing you to take money out and put back in. Help to Buy ISA’s where if you put in £200 the Government add £50.
Umbrella.co.uk will be reviewing the Budget Documents for other key announcements.