So the long awaited budget announcement has been made, you have been to various events and seminars regarding the changes coming into force but all you want is a breakdown of what is happening and when it comes into force.
Therefore DCA have prepared a timeline of events for the budget changes.
23rd March 2015 – Tax on a pint of beer will be cut by a penny. Duty rates on spirits and lower strength cider will be reduced by 2%.
26th March 2015 – Gocompare will launch a new current account comparison tool under the Governments Midata project. Customers will be able to identify which current account suits them best based on how they use their current account.
6th April 2015 – PENSION FREEDOM CHANGES. Savers over the age of 55 will be able to withdraw from a defined contribution pension whenever they want. The sum withdrawn will be tax free for 25% and the remainder will be taxed as usual income.
The 55% tax on any inherited pensions for a beneficiary of an individual who dies before the age of 75 will be abolished. Also payments under a joint-life or guaranteed-term annuity will be tax free.
If a member of a defined contribution pension scheme dies after age 75, the 55 per cent rate is replaced with the beneficiary’s marginal rate of tax, or 45 per cent if funds are taken as a lump sum.
The tax-free ISA allowance increases to £15,240.
Married couples and civil partners will now be able to transfer up to £1,050 of their income tax personal allowance to a higher earning spouse or civil partner. This applies only to basic rate taxpayers.
May 2015 – Air passenger duty for children under 12 on economy class tickets will be abolished to help families to go on holiday.
15th May 2015 – The extended availability of savings bonds for the over 65′s through NS&I ends.
June 2015 – An increase to £50,000 for investment in premium bonds through NS&I.
September 2015 – New tax free childcare scheme is to be launched offering up to £2,000 per child to help with nursery or childminding costs for all working parents with children up to 12 years old.
The anticipated fuel duty increase of 0.54 pence per litre has been scrapped.
A first time buyers Help To Buy ISA is to be commenced in Autumn 2015.
October 2015 – Pensioners and those who will be receiving pension before 6th April 2016 will be able to pay extra National Insurance contributions in order to boost their pension. This scheme will be open for 18 months.
The adult national minimum wage will increase by 3.1% to £6.70 an hour. Apprentice rates for those ages 16-18 increases by 57p to £3.30.
March 2016 – The Air Passenger Duty paid on flight tickets is scrapped for children up to the age of 16 travelling in economy-class. Again this is to provide assistance for family holidays.
April 2016 – A New flat-rate state pension is to be introduced for people reaching state retirement age from 6th April 2016. This full amount is set to be worth at least £148.40 a week.
Any Pensioners currently receiving income from annuities will be able to cash them in by selling them to a third party.
The Lifetime Allowance for people saving into a pension is reduced from £1.25 million to £1 million.
The tax-free personal allowance will rise to £10,800. The Higher rate taxpaying threshold will also increase.
A new Personal Savings Allowance is introduced which will exempt the first £1,000 of savings interest from tax for basic-rate taxpayers and the first £500 for higher-rate taxpayers. It will not apply to additional-rate taxpayers.
A new system to cap the costs of long-term care will be implemented. The state will contribute to personal care costs once someone has spent £72,000 of their own funds on personal care.
Any lump sum payments from a pension left by an individual who died over the age of 75 will be taxed at the beneficiary’s marginal rate of income tax, rather than at 45%.
April 2017 – New £1 Coin to be Introduced. A more secure 12-sided £1 coin is due to be introduced to replace the current model This is due to the original model being easier to forge and has allowed for around 45 million fake pound coins to circulate in the economy.
Personal allowance will rise to £11,000 and higher rate taxpayer threshold increases to £43,300.
April 2018 – Lifetime allowances for pension savings will be indexed to increase annually by the CPI measure of inflation.