The Budget 2014 – as it happened

Economic situation

  • Recovery faster than forecast. Budget for building a 'resilient' economy

  • Office for Budget Responsibility predicts growth in 2014 of 2.7%

  • A small budget surplus by 2018/19

  • 24% fall in unemployment claimants in one year

  • A record number in work. A higher employment rate than the United States

  • Income inequality at lowest level for 28 years

  • Target of 2% CPI inflation continues

  • New Charter for Budget Responsibility this Autumn



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Income tax and national insurance

  • Personal allowance for income tax raised to £10,500 for 2015/16

  • Higher rate threshold to rise in April 2014 to £41,865 and £42,285 next year

  • Class 2 NICs moved into self-assessment



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Savings & pensions

  • ISAs made simpler and limit increased to £15,000 from 1 July 2014

  • 10% savings starting rate replaced by 0% rate

  • New pensioner bonds

  • Premium bond limit raised from £30,000 to £40,000 in June 2014 and £50,000 next year

  • Defined contribution pension schemes – purchasing an annuity not compulsory

  • Capped drawdown limits to increase from 120% to 150%

  • Pension changes in a separate Act to take effect next year



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Investor tax reliefs

  • Curbs on potential abuse of Enterprise Investment Scheme and Venture Capital Trusts

  • Seed Enterprise Investment Scheme made permanent



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Business tax

  • Annual Investment Allowance of £250,000 doubled to £500,000 to end of 2015

  • R&D tax credit for loss making small companies increasing from 11% to 14.5%



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Stamp duty and ATED

  • 15% stamp duty land tax for residential properties over £500k purchased by companies

  • Annual Tax on Enveloped Dwellings for houses over £500,000 held by companies



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Tax avoidance

  • Tax to be paid upfront on avoidance schemes.

  • Increasing HMRC's budget to tackle non-compliance



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Excise duties

  • Fuel duty rise in September cancelled

  • Duty on fixed odds betting terminals raised to 25%

  • Tobacco duty to continue to rise by 2% above inflation

  • Duty on spirits and ordinary cider frozen

  • Beer duty cut by one penny a pint for second year running



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Spending

  • £119 billion welfare cap from 2015/16

  • Lending available for export finance doubled to £3 billion and rates reduced

  • £0.5bn finance for small house builders. Help to buy scheme extended to end of the decade

  • 200,000 new homes for families. New ‘garden city’ in Ebsfleet confirmed

  • £140m extra for immediate repairs to flood defences

  • Grants to support 100,000 more apprenticeships



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Other

  • Tax system for North Sea to be reviewed

  • IHT exemption for emergency service personnel killed on duty

  • A new ‘highly secure’ £1 coin in 3 years’ time

  • Carbon price support rate frozen to end of decade



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Contacts

Business tax team
Private client tax team

Related links

Business tax
Private client tax