When the chancellor delivered his budget speech today there were a few unexpected announcements to go alongside the pre-announced measures, below is a summary of the main points that will impact contractors, freelancers & small businesses.
The UK's GDP is forecast to grow 2.7% this year (up from 2.4%), then down to 2.3% next year before rising again to 2.6% in 2016 and 2.5% in 2018.
The OBR have revised down the forecast deficit to 6.6% this year, falling to 5.5% next year then 0.8% by 2017-18 and finally a small surplus of 0.2% in 2018-19.
Government borrowing is forecast to be £108bn this year, down to £95bn next year and finally leading to a surplus of £5bn in 2018-19.
"Pay-up first" tax avoidance rule - giving HMRC the power to dispute any DOTAS or GAAR tax cases and impose a tax liability due immediately.
HMRC will be given the power to collect tax directly from individual's bank accounts where they owe more than £1,000.
The main rate of Corporation Tax is down to 21% from April and down again to 20% from April 2015, bringing it in line with the rate small companies pay.
The Annual Investment Allowance (AIA) will be doubled to £500,000 and extended until the end of 2015.
From April 2016 self-employed class 2 National Insurance Contributions will be collected through self-assessment rather than having to make weekly contributions.
The VAT registration threshold rises to £81,000 from April, the de-registration threshold rises to £79,000.
The limit at which you are required to treat an interest free director's loan as a Benefit-In-Kind has doubled from £5,000 to £10,000 from April 2014.
Government grants will be available for 100,000 more apprenticeships and a new graduate-level apprenticeship will be developed.
The Employment Allowance goes ahead as planned from April 2014, allowing qualifying businesses to reclaim £2,000 in employers NIC each year.
Stamp duty of 15% will be introduced to residential homes worth more than £500,000 being purchased through a Ltd company.
The personal tax allowance from April will be £10,000, rising to £10,500 in 2015-16.
There is a small increase in the higher rate threshold from April to £41,865 rising to £42,285 in 2015-16.
The 10% tax rate for savings will be removed from April.
Cash and Shares ISA's will be merged, creating one single ISA with an annual savings limit of £15,000 from 1st July.
Lots of changes regarding pensions were introduced including increased flexibility to draw down on defined contributions pensions and free face-to-face guidance at point of retirement for those with defined contribution pension pots.
The annual exemption for Capital Gains Tax rises to £11,000 from April and £11,100 in 2015-16.
The planned fuel duty rise in September has been scrapped.
Beer duty has been cut by 1p a pint and will rise in line with inflation after the alcohol duty escalator was scrapped.
A new ultra secure £1 coin will be introduced in 2017.
Help to Buy scheme for new-builds extended to 2020.
A new garden city to be created at Ebbsfleet.
Tax-Free Childcare costs cap increased to £10,000 per year for each child from Autumn 2015.
Overall this budget is good for any individuals who are looking to save or those who have pensions, both of which came as a surprise to most. In order to pay for these the government are further clamping down on Anti-Avoidance with new measures to force tax to be paid up front and even taken directly from your bank account in certain situations.
There were no mentions of IR35 nor the PSC committee, so at the moment it remains "as you were". We welcome the announcement to bring class 2 NIC into the Self-Assessment process, a small step in simplifying the tax system although much more still needs to be done.
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