Budget 2014 – for payroll and the future
This is a Budget for building a resilient economy. If you’re a maker, a doer or a saver: this Budget is for you.Chancellor of the Exchequer, George Osborne
What is changing in the payroll world?
- On the day before the Budget the Government announced changes to childcare. A new scheme to support families where both parents work for childcare costs of up to £10,000 per annum, with £2,000 worth of tax relief. Does this spell the end of Salary Sacrifice childcare arrangements?
- Announcements were made for future tax years with the rise in personal allowance to increase to £10,500, and the higher rate threshold increasing a further 1% to £42,285 for 2015/2016.
- From April 2015 four million families will also benefit from a new married couples transferable allowance.
- Also announced for the 2015/2016 tax year was the removal of secondary NICs for under 21’s.
So in payroll change terms, the next few years are looking busy!
There is the introduction of new Shared Parental Pay and the transition away from Additional Statutory Paternity Pay, the removal of Contracting Out Pension Scheme in 2016 (money purchase schemes have already gone), the changes for under 21s and the return of the married couples allowance. And of course the associated RTI changes and impacts. Not forgetting Scottish Tax!
We’ve compiled the changes to NICs, Income Tax, and other pay related items in a handy download for you.
Pensions and savings
As part of a long term economic plan to deliver security for the people of this country, significant changes were announced on savings and pensions, with an increase to ISA limits to £15,000 under a New ISA.
There are also significant changes to pensions, with a number effective from 27 March 2014. Download this useful HM Treasury fact sheet which explains the changes.