How the Budget 2014 affects Northern Ireland businessesThe Chancellor of the Exchequer, George Osborne, delivered his Budget to Parliament onxa0Wednesday 19 March 2014.
Changes already due from April 2014
* xa0 Personal allowancexa0will increase from £9,440 to £10,000 from April 2014
* xa0 National Insurance Contributions (NICs):
* xa0 xa0xa0 xa0 primary threshold for employees increases from £7,755 to £7,956
* xa0 xa0 xa0 upper earning limit will rise from £41,450 to £41,865
* xa0 xa0 xa0 new NICs employment allowance of £2,000 begins in April 2014 -xa0read further details on the gov.uk website
* xa0 Corporation tax:
* xa0 xa0 xa0 currently at 23 per cent
* xa0 xa0 xa0 will be cut to 21 per cent from April 2014
* xa0 xa0 xa0 will be cut again to 20 per cent from April 2015
* xa0Alcohol and tobacco dutiesxa0will rise by 2 per cent more than inflation
* xa0Pensions: xa0the total amount you can contribute to your pension scheme with tax relief each year is being cut from £50,000 to £40,000
* xa0 xa0 xa0the tax free lifetime allowance for the value of your pension pot is being cut from £1.5 million to £1.25 million
The Economy
xa0 xa0 Growthxa0forecast:
* xa0 xa0 xa0 xa02.7% in 2014/15
* xa0 xa0 xa0 xa02.3% in 2015/16
* xa0 xa0 xa0 xa02.6% in 2016/17
* xa0 Governmentxa0borrowingxa0forecast.
* xa0 xa0 xa0 xa0£95 billion in 2014/15
* xa0 xa0 xa0 xa0£75 billion in 2015/16
* xa0 xa0 xa0 xa0£44 billion in 2016/17
International Trade
- Overhaul thexa0UK Export Finance’s (UKEF)xa0direct lending programme by doubling it to £3 billion and cutting the interest rate by a third.
- Find out about the UKEF support available on the gov.uk website.
- Step up marketing so that more businesses are aware of the UKEF’s products and services
- Air passenger duty (APD)xa0bands C and D will be abolished from 1 April 2015 – this will mean that flights to South Asia and the Caribbean will pay tax at the lower band B rate.
Housing/construction
- Help to Buyxa0equity loan scheme will be extended until March 2020.
- Government to create a £500 millionxa0Builders Finance Fundxa0which will provide loans to developers to unlock housing units stalled due to difficulty accessing finance.
Help for businesses
- Newxa0NICs employment allowancexa0of £2,000 begins in April 2014.
- Firstxa0enterprise zonexa0in Northern Ireland to be established inxa0Coleraine, which the government will support by offering enhanced capital allowances to investors within that zone.
- Thexa0annual investment allowancexa0to be doubled to £500,000 until the end of 2015.
Personal tax
- Thexa0personal allowancexa0will increase from £9,440 to £10,000 from April 2014 and will increase again to £10,500 from April 2015.
Duties
- Fuel dutyxa0rise planned for September 2014 has been cancelled.
- Beer dutyxa0will be cut by 1 penny from 24 March 2014.
- Duty on spiritsxa0will be frozen for 2014-15.
- Machine games dutyxa0– the government will create a new higher rate of machine games duty at 25 per cent for B2 machines (also known as fixed-odds betting terminals).
- Bingo dutyxa0will be reduced from 20 per cent to 10 per cent.
- Tobacco dutyxa0will increase by 2 per cent above the rate of inflation with changes to come into effect from 6pm on 19 March 2014. Annual duty increases of 2 per cent above the rate of inflation will continue until the end of the next parliament.
Savings
- Axa0new single ISA (NISA)xa0will be introduced, which will be a simpler product with equal limits for cash and stocks and shares. The annual investment limit for the new ISA will bexa0£15,000xa0a year.
- The cap on investments inxa0Premium Bondsxa0will be lifted from £30,000 to £40,000 from 1 June 2014. It will then be lifted again to £50,000 in 2015-16.
Pensions
- All tax restrictions on pensioners’ access to theirxa0pension potsxa0to be removed, ending the requirement to buy an annuity. The taxable part of pension pot taken as cash on retirement to be charged at normal income tax rate, typically 20 per cent, down from 55 per cent.
- There will be an increase in total pension savings people can take as a lump sum to £30,000.
Childcare
- Thexa0Tax-Free Childcarexa0costs cap, against which parents can claim 20 per cent support, will be increased to £10,000 per year for each child. This will mean that eligible parents can now benefit from greater support, worth up to £2,000 per child each year from autumn 2015. Tax-Free Childcare will be rolled out to all eligible families with children under 12 within the first year of the scheme’s operation.
