THE BUDGET 2015: A BUSINESS WORKS SUMMARY

George Osborne set out a pre-election budget, his sixth as chancellor and the last of this current parliament. Check out the Key features of the budget that will affect businesses:

Employment

• Unemployment has today fallen to its lowest on record to 1.86 million. George Osborne announced that ‘The Great County of Yorkshire has created more jobs than the whole of France’.
• Adult, youth and apprenticeship minimum wages are set to rise in October
• Chancellor George Osborne plans to abolish Class 2 National Insurance for the self-employed in the next parliament.
• This April National Insurance will be abolished for those employing under 21’s. From Next April the conservative government plan to abolish it for employing young apprentices.
• The tax-free personal allowance to rise from £10,600 in 2014-5 to £10,800 in 2015-6 and £11,000 in 2016-7. Allowing the low paid to keep more of the money they earn.

Tax Returns

• One of the highlights of this budget is the dramatic change to tax returns.
• By 2020 End of year tax returns will be scrapped and in their place will be real time online accounts. Although people who wish to continue using annual paper returns can continue.
• The switch is expected to start with five million small businesses and the first 10 million individuals in early 2016.
• This online system will allow taxpayers to submit information on a regular basis rather than a rush at the end of January. Individuals and small businesses can submit accounts throughout the year via computer, tablet or smartphone.
• They will then be able to pay their tax at any point throughout the year and spread the costs by paying in instalments. Businesses and individuals will be able to link their own accounting software and their bank account to the digital tax account.

Business

• Farmers will be able to average their income over 5 years for tax purposes.
• In a Fortnight, the government will cut corporation tax to 20% one of the lowest rates of any major economy in the world.
• The review into business rates will take place. The government will implement a £1 billion package to reduce the cost of business rates in 2015-16. Their findings are expected in the 2016 budget.
• There are 5.2 million Small Businesses in the UK and have been described in this year’s budget as ‘The engine of the UK’s Growth’.

Savers

• A new personal savings allowance has been announced. The first £1000 interest on savings income will be tax free.
• The annual savings limit for ISA will be increased to £15,240.
• A new ‘Fully Flexible’ ISA has been introduced allowing savers to withdraw and reintroduce money without losing their tax-free allowance.

Fuel

Fuel duty will remain the same as Septembers planned increase is to be scrapped