Budget Summary 2014 - page 4

Protect your personal
In 2014/15
your personal allowance is
reduced by 50p for every
pound your income is over
£100,000. If you can
reduce your income below
£100,000, eg by making a
pension contribution or
choosing tax-efficient
investments, you should
benefit from the full
19 MARCH 2014
Income tax – personal allowance and basic rate band
For 2014/15, the personal allowance will rise from £9,440 to
£10,000 and there will be a £145 reduction in the basic rate band
from £32,010 to £31,865. For 2015/16, the personal allowance will
rise by £500 to £10,500 and the basic rate band will be cut by a
further £80 to £31,785. There will be a consultation on whether
and how the personal allowance could be restricted to UK residents
and those living overseas who have strong economic ties to the UK.
Transferable tax allowances for married couples
From 2015/16, married couples and civil partners will be able to
transfer £1,050 of their income tax personal allowance to their
spouse or civil partner. Couples will be eligible to transfer where
neither partner is a higher or additional rate taxpayer. The
transferable amount will be set at 10% of the personal allowance
for each tax year.
Starting rate for savings income
From 2015/16, the maximum amount of an eligible individual’s
savings income that can qualify for the starting rate of tax for
savings will be increased from £2,880 (2014/15) to £5,000. The
starting rate will simultaneously be reduced from 10% to nil.
Tax-free childcare scheme
Parents will be able to claim 20% support for the cost of childcare
up to £10,000 a year for each child. This means that the maximum
tax benefit for each child will be £2,000. From autumn 2015, the
scheme will be rolled out to all eligible families with children who
are under 12 within the first year of the scheme’s operation.
Class 2 national insurance contributions (NICs)
From April 2016, Class 2 NICs for the self-employed will be collected
through self-assessment.
Beneficial loans to employees
The limit for the small loans exemption will be increased from
£5,000 to £10,000 from April 2014, as previously announced.
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