It is little more than three months since the Autumn Statement, but here we are in March with another Budget due in the middle of the month. Nearly all of the 2014/15 tax and national insurance numbers were published alongside the Autumn Statement, so there are unlikely to be any surprises there. So what should you be on the look-out for?
The first thing to consider is that this month’s performance from Mr Osborne is effectively his last Budget before the general election on 7 May 2015. Parliament is due to dissolve before the end of March, so next year’s Budget, will be something that can be nodded through quickly, with anything contentious left for a post-election Finance Bill, as happened with Alistair Darling’s finale in 2010. Thus the Chancellor may choose to play politics and include measures for 2015/16 which will depend upon his party retaining power. A possible shopping list includes:
- An increase in the personal allowance for 2015/16, perhaps to the level at which it is possible to scrap age allowances completely. This would be sold as removing more people from tax, although according to the Institute for Fiscal Studies, in 2014/15, the lowest 17% of workers will pay no tax anyway.
- An extension for another year of the £250,000 annual investment allowance, which is currently scheduled to drop down to £25,000 on 1 January 2015. This would be designed to encourage investment by small businesses.
- Changes to the Seed Enterprise Investment Scheme (SEIS). The 50% capital gains tax reinvestment relief is currently due to end on 5 April 2014.
- More moves to bring income tax and national insurance contributions closer together. NICs are set to become a controversial topic in 2016, when the new single tier state pension begins and the employer and employee NIC reductions for contracting out of the current State Second Pension (S2P) disappear.
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