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Keytime: A Bullish Budget for 2015

19th Mar 2015
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This Budget was one of optimism: the economy is growing, debt is shrinking, and plenty of generosity was shown to the middle classes and the regions. But there was no mistaking it as a Budget being delivered just 50 days ahead of a general election - the race is on with votes to be won. With this in mind, the Chancellor set out his stall.

Keytime listened with interest and pulled out a few of the most relevant points:

  • The Chancellor announced the end of the annual tax return, to be replaced by the digital tax account.  The plan is that by early 2016 some 5 million small businesses and 10 million individuals will have one of these accounts and by the end of the next Parliament every individual and small business will have one.
  • The Chancellor abolished not only annual tax returns but also class 2 national insurance contributions for the self-employed.
  • There’s an increase in the personal allowance threshold. It will increase to £10,800 in 2016 and to £11,000 in 2017. This means an additional £600 of earnings will be tax free for most workers. The starting level of the 40pc tax will also rise from £41,865 to £42,385 on 6th April.
  • Farmers were offered some support today. The government will provide support to farmers by lengthening the period over which they can average their profits for income tax from 2 to 5 years from next April.
  • Business rates are being reviewed. We know they are crippling many small businesses, especially long-suffering high street firms. The Chancellor said “business rates have not kept pace with the needs of a modern economy... and needs far-reaching reform.” Some small businesses will be made exempt from paying rates entirely.

Aggressive tax avoidance/evasion is going to help top up the Treasury’s coffers and help clear national debt to the tune of £3.1bn. This will come in the form of the Diverted Profits Tax (aka the Google Tax) and penalties to tax avoiders and those who assist them. Added to this, an additional 21,000 Accelerated Payment Notices over and above the original estimated number will be issued. Mr Osborne said that the country’s tolerance to those avoiding taxes has come to an end.

James Cryne, Managing Director of Keytime, said:

“The annual tax return is clearly an unnecessary burden for some people.  I mean, we all know that HMRC hold information about employment income, bank interest and pensions etc.  It makes sense that they should collate this information for the tax payer and make it available in an on-line account. For some, this turns a once a year chore, with penalties for getting it wrong or missing the deadline, into a simple check and confirm solution.  Linking accounting software to digital tax accounts will take more time, and the Government have said that a solution will be available by the end of the next Parliament. Rest assured we will be following developments very closely and we’ll be bringing clients an easy to use, compatible solution when the time comes.”

0161 484 3500 | www.keytime.co.uk | [email protected]

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