We have to face it, we don’t trust our politicians. They no longer fight for the common man, they instead line their pockets and don’t live in the real world. Their consensus revolves around “it’s only another £1,200 per year extra per person, how hard is that to find?” and “lets sell the North to the Japanese”.
So, with this in mind is it any wonder that we are suspicious of “stay on course”, “everything is fine”, George Osborne?
However, after scrutiny there doesn’t appear to be any massively gaping holes in what Osborne declared. There has been no major grumblings from contractors.
Autumn Statement 2014 – Pensions and ISAs : UK Growth.
The chancellor started by telling us that the UK economy is fairing better than expected. This seems to have hushed the ‘fiscal straight jacket’ rumors that were flying around. Apparently, we are the fastest growing G7 economy with a 3% rate in growth forecast in 2014, up from 2.7% predicted in the March budget. This growth rate is forecast to continue into 2015; followed by 2.2%, 2.4% and 2.3% in the following three years. Unemployment is to fall to 5.4% in 2015 as over half a million jobs have been created this year.
Business investment actually rose 27%, compared to the miserable forecast of 4%. Inflation is predicted around the 1.5% mark for this year, with a 1.2% figure for 2015, keeping interest rates low. For contractors looking to get on the housing ladder, this is great news.
Threats from the Eurozone didn’t seem to get much attention, but Osborne did wax lyrical about the necessity of keeping the economy stable ahead of next years election.
With the election looming it was expected to generate some attention grabbing headlines, but for the UK’s contractors at least, these headlines came thick and fast.
Autumn Statement 2014 – Pensions and ISAs : Personal Allowance & Taxation.
The first point for Osborne’s previous statement is that a £12,500 personal allowance, for everyone, is in place. Don’t think this is generosity; this is clearly a sweetener to be kept in mind when voting comes around. However, we doubt that contractors will be complaining about this. By the end of the decade it is expected that the chancellor will raise the tax threshold to £50,000. The tax threshold for higher earners is to rise to £42,385, which is higher than expected.
Autumn Statement 2014 – Pensions and ISAs : ISAs
From April the 6th, the ISA allowance will increase to £15,240.
However, the most significant announcement for ISAs is that ‘such accounts will be allowed to be transferred upon the account holder’s death to a partner’- without any tax to pay.
Currently, the tax efficient ‘wrapper’ is taken away when spouses inherit ISA accounts, which leaves them liable for tax under distraught circumstances. This could have a significant impact on the tax paid on savings income by the remaining partner. Even if it is just to woo voters, this is a welcome change.
For more information on Contractor Accountants or Limited Company V Umbrella visit the Euro Accountancy & Finance Services website.
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