East of England-based accountants Moore Thompson have welcomed proposals in this year’s Budget that support Britain’s self-employed workers.
This Budget was George Osborne’s last chance to woo the British public ahead of this year’s general election and despite a promise of “no giveaways, no gimmicks” his speech featured a number of proposals that will be widely welcomed by businesses and individuals alike.
One of the biggest groups to benefit was the self-employed, whose numbers have risen by more than 732,000 since 2008, meaning current levels are the highest in more than 40 years. In order to recognise this booming collection of entrepreneurs Mr Osborne announced that Class 2 National Insurance Contributions would be abolished for self-employed workers by the end of the next parliament.
The Chancellor also announced that the annual tax return will be replaced with a new “simplified” online tax account.
Mr Osborne also confirmed that the Government would slash corporation tax to 20% – one of the lowest rates of any major economy in the world. He also promised a “radical” and “wide-reaching” review of business rates, which he said would lead to a reform of the system that would help both large and small businesses.
The Chancellor also announced a significant reform to help the struggling farming sector. He said that farmers would be allowed to average their incomes for tax purposes over five years instead of two – a move expected to provide the UK farming community with £100 million in tax savings.
However, it wasn’t only businesses that benefited from this year’s Budget. As part of ongoing changes to the pension system in the UK, the Chancellor announced that individuals with an annuity would be able to cash in their scheme without facing punitive tax charges of at least 55%. The change will come into force in April 2016 and will mean that people are charged at their marginal rate instead. The personal lifetime pension allowance for individuals will also be reduced from £1.25 million to £1 million.
Savers will also welcome the introduction of a new personal savings allowance, meaning that from April next year the first £1,000 of the interest earned on all of their savings will be tax-free. Higher rate taxpayers will also enjoy the same tax-free status on interest earned; however their allowance will be set at £500 to reflect their personal assets.
Tim Martin, Partner at Moore Thompson, said: “This Budget recognises the significant impact Britain’s self-employed workforce are having on the country’s economy and offers a number of proposals to make their life simpler and provide a boost to the UK’s growing start-up sector.
“Choosing to set up your own business is never an easy option and people often find themselves facing a number of financial issues. If you would like advice following the Budget then we are only too happy to help.”