A Budget for makers, doers and savers….

1. Pensions – ‘far reaching reforms’ were announced, with tax restrictions being lifted allowing pensioners access to their pots. From April 2015 the 25% tax-free pot will continue, the excess currently suffers a 55% tax charge, this will be removed allowing the excess to be taxed at the individuals marginal tax rate. The total pension savings people can take as a lump-sum increases to £30,000. New Pensioner Bonds introduced from January 2015 to secure higher rates of interest for pensioners’ savings, with 2.8% on a one year bond and 4% on a three year bond.

2. Capital Allowances – the Annual Investment Allowance (AIA) has doubled to £500,000 for businesses, giving 100% tax relief on capital expenditure. The AIA has also been extended by a further year for all expenditure up to the end of 2015. Enhanced Capital Allowances have also been extended by three years in enterprise zone.

3. Savers – the 10% starting tax rate on savings income has been reduced to zero. The maximum amount that can qualify for the starting rate will increase from £2,880 in 2014 to £5,000 in 2015. ‘New ISA’ (NISA) – all stocks and shares and cash ISA’s will be merged into one simple ISA. The limits will increase to £15,000 from July 2014 and to £4,000 for Junior ISAs. The cap on Premium Bonds will increase to £40,000 in June and again to £50,000 in 2015.

4. Rate changes – the personal tax allowance will increase to £10,000 from April and by a further £500 in April 2015 to £10,500. The transferable tax allowance will also increase. The threshold for the point at which the 40p rate starts will increase to £41,865 from April and £42,285 from April 2015.

5. National Insurance Contributions – Class 2 contributions will become part of the self-assessment system, removing the need for separate payments being made by the self-employed. The Employment Allowance starts from 6 April 2014, giving employers £2,000 towards National Insurance costs.

6. Seed Enterprise Investment Schemes – will become permanent from April 2014 giving favourable capital gains tax reliefs for investors in small companies.

7. Research & Development – the R&D tax credit for loss making small SME’s will increase from 11% to 14.5%. An SME has fewer than 500 employees and either a turnover not exceeding €100m or balance sheet not exceeding €86m.

8. Social Investment Tax Relief – 30% income tax relief on amounts invested by individuals in qualifying social enterprises, with additional capital gains tax reliefs.

9. Corporate properties – the purchase of residential properties worth over £500,000 within a company will suffer 15% Stamp Duty Land Tax from midnight tonight. Such properties are also exposed to the Annual Tax on Enveloped Dwellings, which will be extended over the next two years to bring in properties worth over £500,000 from April 2016, rather than the £2m limit that currently applies.

10. Cider, potholes and fuel – the duty on cider has been frozen and the duty on beer will be dropped by 1p a pint from next week. The planned rise in fuel duty from September has been cancelled and money has been promised to fix the potholes!