Hart Shaw Business Recovery’s view of the recent announcements made in the 2014 Budget are positive and suggest that it’s good for business.
During his Budget speech, billed as a “Budget for a resilient UK”, George Osborne outlined a number of new policies and announced significantly improved growth forecasts, with the UK economy now expected to grow by 2.7% in 2014/15.
The chancellor announced that he Annual Investment Allowance (AIA) for capital expenditure has been doubled from £250,000 to £500,000, although this will not affect most small and medium-sized businesses; those with heavy capital investment plans will be buoyed by this news and the vast majority of businesses will now get 100% up-front relief on qualifying investments for plant and machinery.
Osborne also pledged to cut energy costs for manufacturers by capping the Carbon Price Floor, while research and development tax credits (to loss making companies) will be raised from 11% to 14.5% from April 2014.
As widely anticipated, measures were also announced to increase threshold for paying tax to £10,500 from 2015.
For private individuals radical changes were announced to pensions and savings. George Osborne also announced that cash ISAs and stocks and shares ISAs will be merged, with a new £15,000 annual allowance and there will be no limit on how much investors will be able to hold. Further, from 1 July 2014 savers will be able to freely transfer any assets they currently hold in either stocks and shares ISAs or cash ISAs to the new ISA.
As well as a move to merge cash and stocks and shares ISAs with an upper limit of £15,000, Osborne announced the reduction from 10% to 0% of the starting rate of tax for savings and an extension of the band to a maximum of £5,000.
Changes to pensions also included the introduction of new pensioner bonds and the removal of all tax restrictions on pensioners’ access to their pension.
Steve Vickers, Tax Partner at Hart Shaw said: “This was certainly a Budget setting out the government’s agenda for the next election, with many measures announced to help businesses and individuals alike.
“Crucially, businesses will be able to increase investment in infrastructure through the AIA, while energy bills will be reduced thanks to the scrapping of green levies. Pensioners and savers will also be cheered through some radical, and surprising, measures.
“As always, we would urge all businesses and individuals to study the small print to see what announcements will affect them and contact an accountant for further advice on how to make the most of these opportunities.”
For more information and for a detailed budget summary, visit www.hartshaw.co.uk.
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