This Pre-Election Budget has thrown up a few surprises and a few give-aways
Annual personal tax returns are to be replaced by new digital tax accounts (projected to be within five years)
Decrease in the lifetime pension allowance – now down to £1million but it will be indexed in line with inflation from 6 April 2016
FATCA-type reporting is to be introduced from 2016 to assist in the fight against tax evasion. Financial institutions with account holders tax resident in countries with which the UK has a Exchange of Information Agreement will be required to collect and report information on a wide range of financial investments and accounts
The VAT threshold has been increased from 1 April 2015 to £82,000
The first tranche of interest income – £1,000 for basic rate taxpayers & £500 for higher rate taxpayers – will be tax exempt. Additional rate (45%) taxpayers will get no tax exempt allowance whatsoever!
Personal allowances will rise to £10,600 in 2015/16, £10,800 in 2016/17 and then to £11,000 in 2017/18
The basic rate band will be increased, reversing the trend in recent years, and will be £31,785 in 2015/16, £31,900 in 2016/17 and £32,300 in 2017/18
Class 2 National Insurance Contributions are to be abolished but no date has been set for the implementation of this measure.
Class 4 National Insurance Contributions are to be reformed
A new ISA account (Help To Buy ISA) is to be launched to help first-time buyers with the Government matching savings on the basis of £50 for every £200 saved by the individual with an overall limit of £3,000 and owners of existing ISAs will find they can make withdrawals and replacements without losing the ISA status
From April 2016, tax relief for travel and subsistence expenses is to be restricted for individuals working through intermediaries eg umbella companies
The Remittance Basis Charge is to be extended such that non-domiciled individuals resident in the UK for 17 out of 20 years will be required to pay £90,000 to access the remittance basis of taxation from this April. The charge for those resident in the UK for 12 of the last 14 years will rise to £60,000
A consultation process will be opened for comment on the Government’s intention to restrict the availability of Deeds of Variation for Inheritance Tax planning purposes