The Budget 2014 — new taxation developments

By Alex Barker and Ian Bradshaw

On 19 March, the cameras gathered outside 11 Downing Street as George Osborne raised his red briefcase. Alongside the changes exercising the tabloids (bingo duty and the price of a pint), there were some rather significant announcements affecting the tax and personal finance landscape. Five of the most important are summarised below.

The personal allowance for income tax will increase to £10,500 from 6 April 2015. It had already been declared that the allowance will be increasing from £9,440 to £10,000 this April, and the government’s latest announcement is effectively an extension of one of the coalition’s flagship tax policies. The motives are seemingly both ideological and economic. The Liberal Democrats have advocated an increased personal allowance for some time, and the government hopes that economic rewards are to be reaped when low earners have more disposable income to spend on goods and services.

The individual savings account (ISA) subscription limit is set to increase to £15,000 from 1 July 2014. ISAs were introduced by the Labour government in 1999, allowing the account holder to save and receive tax-free interest. The chancellor announced that all existing ISAs will become new ISAs (NISAs) on 1 July 2014, and the annual limit on how much can be put away will rise to £15,000. The previous distinction between cash ISAs and stocks and shares ISAs has effectively been abolished, and it will be possible to hold a mix of cash and shares within the same account…

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