The Chancellor of the Exchequer’s 2014 Budget given on 19th March, included changes to savings, pensions and economic projections.

PCG said that the budget backed business with ‘a nod to the self-employed’. Commenting on the budget announcement, PCG’s Director of Policy and Public Affairs, Simon McVicker, said:

“Independent professionals offer the flexible access to specialist skills which businesses need in order to grow while mitigating risk. They are a vital component in any truly resilient business landscape. It is therefore very encouraging to see the Government start to consider those in business on their own account. For example, the extension of the childcare scheme to the self-employed is a positive step forward, particularly for female freelancers.”

Below are the main points of the Budget 2014:

  • December 2013’s forecast of economic growth was 2.4%. 2014 is set to see economic growth reach 2.7%. Growth in 2015 is forecast at 2.3%.
  • The 20% income tax earnings threshold for 2015 will be raised to £10,500.
  • The higher rate tax earnings threshold will rise in 2015 to £41,865.
  • Cash ISAs and stocks and shares ISAs will be merged to produce a single £15,000 tax-free ISA limit.
  • 10 pence savers rate removed.
  • The Welfare spending cap for 2015-16 will be £119billion.
  • Business investment allowance will double to £500,000.
  • Employers’ NICs are exempt for workers under the age of 21.
  • Properties over £500,000 acquired through companies will be subject to stamp duty at 15%.
  • Purchase of annuity not compulsory for pensioners and tax restrictions on pension pots are loosened.
  • Planned fuel rise will not be implemented.

McVicker commented that mobile freelancers would benefit from the scrapped fuel duty increase and the rise in personal allowances. He also expressed concerns that measures to combat tax avoidance should not affect freelancers, contractors and sole traders who operated compliantly.

“PCG is concerned by the Government’s plans to push ahead with the onshore intermediaries legislation which targets tax evasion. The Chancellor is right to clamp down on tax evasion but the Government, in its commitment to tackle this problem, must be very careful not to target legitimate independent professionals who are driving growth in the economy.”
If you would like to discuss how Budget 2014 might affect you, call K&B Accountancy Group today on 0207 078 0211 and one of our friendly advisers will be pleased to assist you.