The Budget is only a couple of hours away, so what should we be looking out for?
The economy is in the healthiest state since before the financial crisis and both consumer and business confidence is up. With a general election in May, the tone of George Osborne’s Budget speech is likely to be highly political. The Chancellor is looking to win over the undecided voters with income growth while possibly easing the planned spending cuts.
So what may matter to you personally? Personal allowances and income tax thresholds may reduce the amount of income tax us trainees have to pay. The Autumn Statement announced the personal allowance will increase to £10,600, the Chancellor may repeat to further increase it to £12,600 over the next parliament, should they be re-elected of course. We also look out for an indication that 40% tax threshold will only apply to incomes above £50,000, good news for those a bit more senior in the firm.
In 2014, we saw the biggest changes to pensions in almost a century and everybody is talking about them. Pensions may not be in the forefront of a trainees mind, however the vast majority of us do contribute to our pension since the ‘opt out’ work pension scheme came into place. Politically, the announcement on pension changes tomorrow could be most crucial to the undecided electorate. It looks like the Chancellor is keen to protect current pensioner benefits and while also making changes to future pensioners. Enhanced tax relief for pension contributions could mean a reduction in the amount of annual contributions which can qualify for tax relief.
Again, another tax not as prominent in your life as income tax but may affect you in the future is inheritance tax. Rumour has it that there may be a suggestion of the inheritance tax nil rate band increasing from £325,000 to £1 million. We will be looking for time frames and if this figure is per person or per married couple/civil partnership.
Tax evasion or tax avoidance? The current Parliament has taken tough stances against both and we watch out for the announcement of criminal sanctions against both the tax evaders and providers of avoidance advice.
We will be providing insight into the #Budget2015, so if you have an assessment centre coming up or would like to stay commercially aware, tune in! Also watch out for our post-budget overview on Spilling the Beans.
Be sure to follow http://www.grant-thornton.co.uk/en/Budget-2015/ for live updates. Also on twitter @izzycandy and @GrantThorntonUK, and @gt_trainees on instagram for all the action throughout the day. Also look out for the Grant Thornton specific #GTBudget and the general #budget2015 across all your social media platforms.