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Budget 2014

Here's where you'll find a range of small easily accessible articles giving you the salient points of the budget. Its not absolutely everything that was said but its what affects most people most of the time.

Budget 2014: Employment related matters

There have been no changes to the rates of NIC. The employment allowance that commences on 6th April and is £2000 per employer (for almost all employers) and is to be claimed through RTI processes each month.

The point at which employers pay NI and at which employees pay NI is being “harmonized” at £153 per week and this means that the magic salary number is now £663 per month.

Directors Loan account balances are currently considered a benefit in kind if no interest is charged on the balance by the company. Any amount in excess of £5000 is taxable in this way. The limit is increasing to £10000 from 6th April 2014. Please note though that these amounts are still subject to S455 tax at 25% and which is payable by the company

Budget 2014: Income tax changes and other odds and ends

The higher rate threshold is rising for the first time in a few years to £41865 from 06/04/14 but it is not a significant increase and certainly doesn’t keep step with any measure of inflation!

Personal allowances rise to £10000 and to £10500 in the following year.

The other rate thresholds remain unchanged at £100,000 when you start to lose personal allowances and £150,000 when the tax rate rises to 45%

Budget 2014: VAT

There were a few major changes for Vat registered businesses in the budget:

Standard rate of VAT remains unchanged at 20% but the threshold, the point at which you must register increases by £2000 to £81,000 from 1st April 2014.

Remember that the VAT threshold is the total of the LAST 12 months sales not the last accounting or business year’s sales. Its easy to get caught out with this and face penalties for late registration. You must submit your application for registration within 30 days of reaching the threshold. There are some other important things you need to know about VAT registration – this is just ONE of the rules.

Budget 2014: Annual Investment Allowances

After reducing the annual allowance to just £250k, this is set to rise to £500k from 1st April or 6th April depending on the business structure you are operating.

There is very little time to do any planning for this change except that if you intend purchasing a large asset or piece of equipment (or a number of them), wait till after 6th April so that you don’t fall foul of any apportionment rules.

Budget 2014: Corporation Tax changes

The general trend towards reducing the higher rate is continuing and by 1st April 2015 will be the same as the small companies rate of 20%.

 

Rates currently are as follows: