The Practical Guide to Limited Company Tax
If you have chosen to operate your business as a limited com...
By Jonathan London on 10th March 2015
Chancellor George Osborne is considering a fresh rise in the personal tax allowance in his Budget speech later this month, according to a report.
The Sunday Times has said Mr Osborne is thinking of raising the allowance to £11,000, which would take effect from the start of April and would mean the coalition would have raised the figure at which income tax starts to be charged by £1,000 more than agreed between the Conservatives and Liberal Democrats at the start of the parliament.
The £10,000 figure was reached a year ahead of schedule after a series of incremental rises that began with an increase of the allowance from £6,000 to £7,475 in Mr Osborne’s first Budget.
It may be seen by some as a political move aimed at boosting the government’s standing just before the general election, but in any case it means that the self-employed could also benefit.
The allowance has already been raised to £10,500 and is due to increase to £10,600 next month, so those preparing tax returns who have factored in a smaller increase in the allowance may need to make further adjustments.
Of course, any Budget can bring new tax changes that affect the self-employed in all manner of ways, although major legislative changes are not expected this late in the parliament. Instead, the speech is likely to be relatively light on substance as Mr Osborne keeps his powder dry in preparation for what he will hope is his first Budget as chancellor after the election.
With an election looming, the various party manifestos will soon be published and these will be worth studying by the self-employed and SME owners, as it is not just the Labour and Conservative party policies that may be brought to bear.
The tax allowance increase was a Liberal Democrat policy that was adopted as part of the coalition deal and any post-election deals may also involve the adoption of tax policies from the manifestos of the junior partners – whoever they may be.
We’ll be running our usual review of the Chancellor’s Budget speech in due course. Keep an eye on our blog, social media channels, or your inbox!
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