On 18 March, George Osborne, Chancellor of the Exchequer, announced the budget for the 2015/16 financial year and beyond. This is a budget directed at savers, pensioners and continuing the national recovery.
State of the economy![UK 2015 budget summary]()
- UK is the fastest-growing major economy with a 2.6% growth rate in 2014.
- 2.4% growth forecast for 2015 followed by 2.3%, 2.3%, 2.3% and 2.4% over the following four years up until 2019.
- Unemployment is set to fall to 5.3% in 2015.
- Inflation predicted to be 0.2% in 2015; the target is still 2% CPI. Inflation is now at its lowest rate in half a century.
- From March 2015, the duty rates on beer, spirits and lower-strength cider, will be reduced by 2% and frozen on wine.
- The fuel duty increase will be cancelled.
- Ultra-fast broadband should be available to nearly all UK homes and businesses.
Personal and business taxation
- Personal tax allowance to increase to £10,600 from April 2015, £10,800 from 2016, and £11,000 from 2017.
- The first £1,000 of all savings will be tax-free, and the first £500 for higher-rate tax payers.
- Higher-rate 40% tax threshold rises from £41,865 to £42,385 from April 2015 and £43,300 by 2017/18.
- Class 2 National Insurance will be abolished for the self-employed.
- National Minimum Wage will increase by 20p in October 2015 from £6.50 to £6.70.
- Annual tax return to be abolished; instead information will be uploaded online into “digital tax accounts” from 2016/17.
- The main rate of Corporation Tax will drop to 20% for all businesses.
- Small business rate relief to be reviewed.
- Cap on Gift Aid extended from £5,000 to £8,000.
- The government will no longer allow businesses to take account of foreign branches when calculating how much VAT on overhead costs they can reclaim in the UK.
- The government will continue to support zero-emission vans to 5 April 2020.
Savings, investments and pensions
- The Individual Savings Account (ISA) threshold increases from £15,000 to £15,240. Individuals will also be able to withdraw their money and re-bank it within the same year without losing their ISA tax benefits.
- “Help To Buy” ISA on the way: “For every £200 you save for your deposit, the government will top it up with £50 more.”
- From next year, the lifetime pension allowance will be cut from £1.25 million to £1 million, limiting large pension pots. Fewer than 4% of pension savers currently approaching retirement will be affected.
- From 1 April 2015, the VAT registration threshold will be increased from £81,000 to £82,000.
- A new £90,000 charge for non-domiciled persons resident in the UK for 17 of the past 20 years will be introduced. The charge for 12 of the last 14 years will be increased from £50,000 to £60,000.
- From 6 April 2015, Capital Gains Tax will be payable in the UK for non-resident property owners.
- New rules to target Inheritance Tax avoidance through the use of multiple trusts.
- From 1 April 2015, charges will apply on residential properties owned through a company and worth more than £2 million.
- The government will address Entrepreneurs’ Relief rules for tax planning by targeting structures so that people with only a small indirect stake in a trading company can benefit from the relief.
For further insight into how this will impact your overseas company setting up in the UK, or those companies who are already established here, please get in touch.
We are very grateful to our sister company 1st Contact for curating this post.
Through Sable Group, we are able to offer management of the wealth, financial and nationality needs of international clients. You can view Kevin Beare & Co full analysis of the 2015 Budget Statement here.
