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Introduction
The outlook for the UK economy may be increasingly optimistic, but with the eurozone in crisis, concerns
remain over the ongoing risks posed by a fragile global economy. In the 2015 Summer Budget, Chancellor
George Osborne sought to emphasise the importance of economic security and pledged that Britain would ‘fix
the roof while the sun shines’.
Proper forward planning remains the best way to ensure that you are on course to obtain your own business and
financial goals.
Business strategies
A good, comprehensive business tax strategy will include
considering such elements as:
• choosing the right business structure
• making the most of the available incentives, allowances and
reliefs
• claiming tax deductible expenses
• deciding on the best year end date
• minimising your liability to capital gains tax (CGT)
• taking into account the role of family members
• plans for a tax-efficient exit from your business.
Personal financial strategies
Meanwhile, a robust personal tax strategy will focus on ensuring
that your long-term financial goals are met for the rest of your
life and for the future of your family and dependents. Our role
is to help you make the most of the many allowances available
and to suggest strategies that suit your particular circumstances.
An effective personal strategy will include such elements as:
• a tax-efficient remuneration package
• tax-efficient ways to extract profit from your business
• planning to ensure a comfortable retirement
• estate and inheritance tax (IHT) planning
• tax-efficient gifting strategies.
Recently announced measures
The Government has recently announced a number of key
measures affecting businesses and individuals, with the stated
aim of encouraging savers and supporting business and working
families.
Measures for savers
The Spring Budget on 18 March unveiled some significant
measures for savers, including a relaxation of the rules on
annuities, and a new Personal Savings Allowance, both of
which take effect from April 2016. In addition, a new Help to
Buy ISA will from 1 December 2015 begin to assist first time
buyers with the purchase of their first property, while plans to
increase flexibility for Cash ISAs will in the future allow savers to
withdraw and replace money without it counting towards their
annual subscription limit.
The Chancellor subsequently made a number of additional
announcements in the Second Budget on 8 July, some of which
are outlined below.
Business measures
Annual Investment Allowance (AIA)
After 31 December 2015, the maximum amount of AIA for all
qualifying expenditure on plant and machinery was set to fall
from £500,000 to £25,000. However, in the Second Budget it
was announced that the limit will instead be set at £200,000
with effect from 1 January 2016.
Employment Allowance
From April 2016 the Employment Allowance will increase by
50%, allowing businesses to save up to £3,000 on their national
insurance bill.
Corporation tax
In addition to previous cuts, the main rate of corporation
tax will be reduced to 19% for the financial years beginning
1 April 2017, 1 April 2018 and 1 April 2019, and 18% for the
financial year beginning 1 April 2020.
Personal measures
Inheritance tax (IHT) allowance
Changes to the IHT rules will include a new main residence
allowance starting at £100,000 and rising to £175,000 by 2021.
This could allow families to pass on up to a total of £1m to their
children without paying IHT.
Pensions annual allowance
For those with income (including the value of any pension
contributions) above £150,000, the benefits of pensions
tax relief will be restricted by tapering away their annual
allowance to a minimum of £10,000. This will be effective from
6 April 2016.
A new National Living Wage
From April 2016 a new National Living Wage (NLW) in the form
of a premium on top of the National Minimum Wage will be
introduced for workers aged 25 and above. Initially set at £7.20,
it is expected to rise to over £9 by 2020.
We can help with all of your tax and financial planning needs.
For a strategic review of your finances, please contact us.