deliver plenty of modest one liners about the how the economy is continuing to recover and that it is happening faster than forecast. If the Office for Budget Responsibility (OBR) predictions are anything to go by, then this year, our economy will become larger than it was before the recession began 6 years ago and by 2018/19 we are to be in the black. But don’t let us become complacent as this will only happen if “current plans are adhered to” we were told; “this government are not going to jeopardise the progress made so far.” This could come with a health warning that excessive revisions appear to be unavoidable . The announcement that we are to have new £1 coins produced by 2017 caused a surprising commotion in the house. Did we miss something or is it the fact that they are to take the shape of the old ‘thrupenny bit’, thus igniting fond memories from some of the snoozing back benchers? Apparently one in thirty pound coins are now counterfeit and the cost to us is millions each year in fraud; the Chancellor did say a more resilient pound for a more resilient nation – did you see what he did there? From a man who also said, lower borrowing and less interest means less debt; well you can see why this man is the Chancellor of the Exchequer. Britain’s potholes are to receive more investment as are the damaged flood defences and of course huge investment for travel services in various regions; proof that it isn’t all about the HS2. As ever, for any insomniacs out there, the full Budget 2014 document is available should you wish to read through its 120 pages. But to keep you informed and before you decide whether that is actually a necessary use of your time, below is a summary of the highlights.
Main Budget Summary
Personal tax
Income Tax, personal allowances, rates of tax and thresholds for 2015 to 2016
For 2015 to 2016 the personal allowance for those born after 5 April 1948 will increase to £10,500 and the basic rate limit will be £31,785.
For 2015 to 2016 the starting rate for savings income will reduce from 10% to 0%, and the maximum amount of an individual’s savings income that can qualify for this starting rate will increase to £5,000. The transferable tax allowance for married couples and civil partners announced at Autumn Statement 2013 will be set at 10% of the personal allowance from 2015-16. This means it will be £1,050 in 2015-16. CIPP comment Pre-budget BBC chat said that ‘a clever personal tax surprise’ would be announced. Can anyone see what’s clever?
New Individual Savings Accounts (NISA), Junior ISA and Child Trust Fund (CTF): increasing flexibility for savers and investors
With effect from 1 July 2014 the annual subscription limit for cash and stocks and shares ISA will be equalised at £15,000, and restrictions on the transfer of funds between stocks and shares and cash ISAs will be removed. Consequential changes will be made to the rules concerning the securities and other investments that can be held in an ISA, and Core Capital Deferred Shares issued by a Building Society will also be eligible for investment in an ISA and CTF.
CIPP Policy News Journal
16/04/2014, Page 49 of 519
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