The Autumn Statement, delivered before the end of 2013, revealed much of what is decided for the upcoming 2014 tax year, but with the General Election due May next year, this Budget may have a voter influence leading to further changes influencing your pocket.
Our thoughts:
- Already announced is the £1,200 childcare tax break as a replacement for childcare vouchers. Due to be phased in from 2015. You can read more about it here - UPDATE: the scheme has now been raised to £2,000 - so, once introduced, parents will only have to pay 80 percent of childcare costs up to a maximum of £10,000 rather than the previous £6,000.
- The increase of the tax free personal allowance to £10,000 from this April. An increase of £560 over last year, this provides an annual reduction of £112 in tax paid for a basic rate taxpayer - however, increases in personal allowances have been paired with the gradual lowering of the higher rate band. There is a notion of increasing this to £10,500 for 2015 but the 40 percent tax band limit has been in freefall in response.
- From April, businesses can claim a £2,000 employment allowance to go towards paying employers national insurance contributions. The Government had announced a removal of ER's for employees under 21 for 2015, but this may be brought forward.
- An issue which has come up over previous years - but has escaped without change - is the removal of higher rate tax relief on pension contributions. It's possible no change will occur again, but speculation exists around the 25 percent lump sum which is tax free at the moment, could be lowered.
We have already updated our tax calculators to use the information and added most new tax updates to our 2014 Budget Calculator.
Keep updated on Budget day by following our twitter feed @uktaxcalculator.