Budget 2014 – savings?

This was billed as a budget for ‘makers, doers and savers’.  Recent years of recession mean that many probably feel they have been making do and not saving!

Before even beginning to think about making long-term use of the various savings incentives offered, self-employed taxpayers need to know that they are saving enough short-term to pay their tax under Self Assessment.  HMRC offer the facility to make regular (ie early) payments if wished, but neither this nor saving into your own account give much comfort if the amount saved is too little.  In terms of setting money aside for tax bills, the good news is that the proportion of income/profits which most of my clients pay over in tax should stay similar or possibly even drop slightly over the next two years.  I am happy to do a rough calculation at any point based on estimated figures for clients wanting to check that they are saving enough for their tax bills.

Key rates and allowances are shown in the ‘Budget News’ page (select above).

Pension rules are set to become a great deal less restrictive during the next year, particularly in terms of how a pension may be drawn on retirement.

Not in the budget, but important for anyone owning a second property, is a change to principal private residence relief.  The time during which you can live elsewhere before selling a former home tax-free falls from three years to eighteen months.

If you have any questions following the Budget, do contact me.