The 2014 Budget – The key points of Chancellor George Osborne’s Budget.

A recruiter’s view on the 2014 Budget by Chancellor George Osborne.

INCOME TAX

  • Limit at which people start paying tax to be raised to £10,000 from 6th April 2014 (Revealed in 2013 Budget)
  • Limit at which people start paying tax to be raised to £10,500 from 6th April 2015
  • Higher rate tax threshold increased (first time this parliament) from £41,450 to £41,865 from 6th April 2014
  • Higher rate tax threshold increased from £41,865 to £42,285 from 6th April 2015
  • Users of tax avoidance schemes to be required to pay tax upfront before arguing in court

TBOS COMMENT
With the personal allowance increasing it means more lower paid workers will not be taxed and should mean more money in your pocket each month. The £500 increase in the basic rate threshold will mean taxpayers will get £100 in their pocket assuming there is no change in their wages. Higher earners also will see the benefit due to the increase in the higher rate threshold.

HELP FOR BUSINESS

  • Corporation tax to be cut by 1% to 20% from 1st April 2015 (Revealed in 2013 Budget)
  • New employment allowance to cut National Insurance bills cut by £2,000 for every firm (Revealed in 2013 Budget)
  • Business Rate discounts and enhanced capital allowances in enterprise zones extended for 3 more years
  • 30% income tax relief on Social Investment Tax Relief
  • Seed Enterprise Investment Fund made permanent with 50% tax relief for the year that investor made the investment.

TBOS COMMENT
The £2,000 cut in National Insurance bills will mean that each business will be £166.66 better off each month on their wage bills. We see this as a way of moving single person companies towards taking a higher salary (£22,400) and dividends due to the normalisation of the tax levels and no Employers NI due.

JOBS

  • Enterprise zones have created 7,500 jobs and attracted £1.2bn investment with plans to open first Enterprise Zone in Northern Ireland
  • Extra £85m provided for Apprenticeship Grants to help 100,000 more young people into employment

TBOS COMMENT
With the news that unemployment had dropped by 63,000 before the 2014 budget was announced is a welcome sign that the job market is improving and these extra measures can only be good for the industry.

TRANSPORT AND INFRASTRUCTURE

  • £200m available to fix pothole and £140m extra for flood defence repairs and maintenance

TBOS COMMENT
Good news for the construction and engineering industry and may open up further opportunities for recruiters.

ENERGY AND THE ENVIRONMENT

  • Government investing in new sources of energy to increase its renewable generation
  • Government will be working with Oil and Gas industry to ensure UK has right skills to benefit from the UK ‘s reserves

TBOS COMMENT
The investment in the renewable energy and Oil & Gas industry means there may be recruitment opportunities for recruiters.

HOUSING

  • Help to Buy equity scheme extended until 2020
  • Support for building of more than 200,000 new homes

TBOS COMMENT
This shows that the Help to Buy scheme launched last year does appear to be working and helping anyone not just first time buyers to be able to get mortgages. The support for new housing is good news for the construction industry and may mean recruitment opportunities are available for recruiters

FUEL, ALCOHOL AND CIGARETTES

  • September’s fuel duty rise scrapped and freeze on fuel VAT will continue
  • Beer duty to be cut by 1p per pint
  • Duty on Cider and all spirits frozen
  • Cigarette duty will rise by 2% above inflation

TBOS COMMENT
Although this sounds like good news for motorists it doesn’t mean that petrol prices will not increase only that the tax will not rise. It is also good news for drinkers but not for smokers.