For Budget 2014 the economic pointers are looking better and the Chancellor opened his speech with a positive assessment of the improving economic forecasts and prospects for the future. He said that manufacturing was ‘not finished in the West’ and stressed that the Government is on the side of manufacturers. He also said that he wanted to make this a Budget for savers.
Mr Osborne would no doubt have had one eye on the General Election next year when in formulating his Budget plans. So there was an expectation of tax ‘giveaways’ to woo many voters who are feeling hard pressed to make ends meet. The Chancellor talked of him having to balance the books – any tax reductions would have to be met by spending restrictions. So this did not bode well.
However, there were a few surprises which had not been leaked in the run up to the Budget.
- Further moves on anti-avoidance with tax payable up front for those indulging in aggressive tax planning – this may have retrospective effect
- A significant increase in the Annual Investment Allowance for businesses
- Material changes to the ISA regime and the investment limits
- Radical changes to the pensions regime
- The removal of the 10% savings rate
- Further moves on personal tax allowances and rate bands to reduce income tax for all those earning less than £100,000
As you will see from the detailed measures there are other positive moves which will affect a range of businesses and individuals.
In conclusion a positive Budget for many but as always the devil is in the detail and nasty surprises may yet be found.