We are well in to 2018 and the financial year is coming close to its end. You should have an indication of how you want to take your business going forward. In our previous blog we talked about goals and achieving them with your strengths and opportunities. This time around we talk about the best ways to expanding your business.

We are finding this is the time of year a lot of our clients are needing budgets and cashflows. A detailed cashflow can inform you when cash is available to spend or if cash is running low ahead of time. Knowing this ahead of time can avert any crisis and indicate to you when action is needed so you are well prepared.

Knowing your cashflow needs at least a year in advance will give you a more accurate picture of your finances. Regular maintenance of this important as you don’t want to rely on old figures in this ever changing environment.

Budgets are equally as important as a cashflow. If you have expansion plans in mind, then you need to master your budget. Are you looking to get a second office? Or are you looking to get a bigger office?, do you need new equipment.   Having an up to date budget can give you clarification on which may be the best way to expand your business. Budgeting is also a great way to indicate where overheads may need to be cut down. You may be over spending on some things but then neglecting the investment in other departments of your business. This is where a budget will help balance your business.

With any expansion plans you may have, you’ll need the cash to back it up. There are many ways to obtain the finance, but the most conventional way is to get a bank loan. With your cashflow and budgets shiny and polished will keep the bank manager sweet. You can then enforce your plans to expand and grow!

Its a couple of weeks to get everything done and ready for the when the New Year starts up again

6 April 2017

The government have made a number of changes to taxation during the year so its good to have a plan to make sure you maximised your tax free allowances.

Check you have used up all of your tax code,   because once its gone its gone for good and starts  fresh again in April.   The tax code is currently £11,000 for the year for individuals.

Husband and wife you can transfer £1,000 from either partner to the higher earner, this is good for part time or if a partner doesn’t work.

Have you bought your equipment ready for the new year to start.  Think of new equipment as not a ill put that off until later but an opportunity be more efficient, speed up your work or even make it easier for you.

Capital Gains Tax allowances timing of when you sell an asset is key as theres £11,100 tax free allowance for each year this is additional to your normal income tax code.

Flat Rate Scheme is changing from April 2017 are you ready, it will be 16.5% payment over if you are a business that is mainly labour orientated.

Are you one of the many higher tax rate earners who is having to deal with the mortgage tax relief restriction.   Wear and tear allowance has now gone,  keep all of your receipts if you are replacing furniture or equipment in your rental house, you cannot claim without your documents.  It is replacement only, first year purchases are excluded now.

Again Child Benefit is restricted or even taken away if you are a higher earner over £50,000

Child Care Vouchers ceases at the end of April 2018, have you signed up to them its £55 per week tax free allowance which saves you tax and national insurance for income of less than £43,000 per annum.

Have you used your £15,240 ISA allowance it all starts again in April.

Don’t forget the dividend tax rules have changed dividends now attract 7.5% to basic rate if your dividends are over £5,000.   32.5% for anything over £43,000 make sure youre saving your tax money.

So get planning,  check these items if you missed any of these out of your routine this could be saving you money.

A couple of updates on the Budget released in July 2015

Please see a couple of articles with links to the website below.

Buy-to-let investments

The other major property-related changes in the Budget statement will affect “buy-to-let” investors in residential property (whether in the UK or overseas). Investors in commercial property are unaffected; as are investors in properties which meet the criteria to be treated as furnished holiday lettings. There are two separate changes.

Wear and Tear

The first change relates to the “Wear and Tear” allowance for furnished lettings. It applies to companies as well as to individual landlords (but not to furnished holiday lettings). At present, the costs of replacing furniture and fittings are not tax-deductible. Instead, a notional deduction is given for tax purposes equal to 10% of rents. HMRC seem to consider that in many cases this is over-generous and from April 2016, it is intended that the 10% deduction will be abolished and instead tax relief will be given for the actual costs of replacements. Note that this change does not affect tax relief for expenditure on routine repairs to the property, including furniture and fittings in it, which will continue, as now, to be tax-deductible in full.

Financing costs

The second change is in relation to “finance costs” such as mortgage interest, interest on loans to buy furnishings and fees incurred when taking out or repaying mortgages or loans. Starting from 6 April 2017 (and phased in over 4 years from then) tax relief for these costs will be restricted the basic rate of Income Tax. This restriction will apply to individuals (presumably including individual members of partnerships or LLPs) only. It will not affect companies, but the position of trusts is not yet clear. No Income Tax relief is of course in any event available for capital repayments of a mortgage or loan.

Instead of deducting finance costs from rents to arrive at taxable profits, landlords will instead receive relief in terms of tax by deducting an amount equal to tax at the basic rate on the finance costs from the tax otherwise chargeable on the profits. If the tax deduction for finance costs exceeds the tax otherwise payable on the profits the excess can be carried forward and used in subsequent years.

The change will be phased in so that for 2017/18 the new rule will apply to 25% of the finance costs (with the other 75% being deducted in computing taxable profits as now); for 2018/19 the restriction will apply to 50% of the finance costs; for 2019/20 to 75%; and from 6 April 2020, 100% of the finance costs will “disallowed” and dealt with under the new rule.

Although its impact is ameliorated by the delayed and phased introduction, this change will significantly change the economics of some buy-to-let portfolios. Since the change does not affect companies, one response may be to consider adopting a limited company structure. But there are many factors to consider in choosing the right structure, summarised in our recent briefing note and the position is further affected by the change from April 2016 of the way in which dividends are taxed, also announced in the Summer Budget. The tax credit attaching to a dividend will be abolished and dividends will be taxed as normal income albeit at special rates of tax (with exemption for the first £5,000 of dividends). Broadly, this will increase the effective rates of tax on

http://www.bkl.co.uk/resources-and-publications/budget-insights/summer-budget-2015/summer-2015-budget-effect-on-property-investors/

Small firms face another taxation shake-up

KEY POINTS

• The changes to dividend tax are the start of a process to reduce the tax advantages of incorporation.
• For existing companies dividends are still generally more tax efficient that salary, though the advantage are reducing.
IR 35 and personal service companies are back on the government’s agenda.
• The OTS has been asked to look again at the alignment of tax and NIC and at small company taxation generally.
• There will be much to talk about with clients – many of them could face significantly higher tax bills next year.

• Employed versus self-employed.
• Incorporated versus unincorporated.
• Dividend versus salary

Seeing the bigger picture

So what is happening? After a couple of days reflecting on the Budget announcements I am starting to see what I think are the overall themes, although many of the details need to be firmed up. I’m writing this in advance of the publication of the Finance Bill so what follows will need to be reviewed against the small print.

The most obvious change is in the taxation of dividends. From next year dividends will have no tax credit attached (thus removing the often confusing distinction between “gross” dividends and “net” dividends) and the amount received will be all that matters.

Dividends will be taxable at 7.5%, 32.5% and 38.1% respectively, depending on the marginal rate. As we will no longer have to take into account the grossed-up amount of the dividend in determining which rate band somebody falls into there are likely to be some odd results close to the rate band changes.

Those rates represent real increases in tax. The blow is, however, softened by the introduction of a £5,000 dividend allowance for all taxpayers. The assumption is that this will mean that an individual who receives total dividends in a year of £6,000 will be taxable on £1,000.

I did see some commentators suggest that it meant something different: that if the dividends were less than £5,000 no tax was paid, but once they got to £5,001 tax was paid on the whole amount.

I don’t think that that can be right but, until we see the legislation, we can’t be certain. I will assume in the rest of this article that the former reading is the right one.

What’s the objective?

Why has he done things this way? First, I believe that the £5,000 limit is all linked with digital tax accounts. Just as we saw earlier in the year with savings income, taking out small amounts from tax should reduce the compliance burden considerably.

A typical self-assessment taxpayer whose dividend and interest income are small should have little to enter onto his digital account (I say should because we don’t yet know the mechanics of all this).

Second, the changes will raise more tax from those few extremely wealthy people with massive dividend portfolios. But third, and this is the key change, it will directly affect small businesses.

The Budget Red Book is clear on this. It says at 1.189:

“These changes will also start to reduce the incentive to incorporate and remunerate through dividends rather than through wages to reduce tax liabilities. This will reduce the cost to the Exchequer of future tax motivated incorporation (TMI) by £500 million a year from 2019-20. The tax system will continue to encourage entrepreneurship and investment, including through lower rates of corporation tax.”

There are two limbs to this: incorporation and dividend versus salary. Let’s take them in reverse order. A low-salary, high-dividend route still looks to be more tax-efficient even after these changes. Everybody has a different way of doing the comparison.

I like to keep it simple and look at a basic rate taxpayer who has used up his personal allowance against salary and is looking to take another £10,000 out of his company.

This confirms that the dividend route is still more efficient. This is consistent with what is said in the Red Book with its reference to “start to reduce the incentive”. I can only read that as a very strong hint that dividend tax rates will eventually be ratcheted up to align salary and dividends.

The chancellor hasn’t done it by putting National Insurance on dividends – with all of the problems that would have caused elsewhere in the tax system – but the new dividend tax is in some ways a back door way of doing the same thing.

So, the message to clients is: expect to pay more tax next year. If, as a result, they question the chancellor’s triple-lock announcement about no increases in tax rates, this query might be passed to 11 Downing Street.

Tax-motivated incorporation

What about the other element – the tax-motivated incorporation? Many people incorporated their businesses at the time of the 0% corporation tax band and, to an extent, all actions taken since have been trying to close the stable door after the horse has bolted. But these new changes are intended to discourage individuals from incorporating purely to obtain a tax advantage.

The computations here are trickier because we do not yet know the National Insurance bands for next year and therefore complete precision is not yet possible.

But the tipping point at which incorporation starts to deliver significant tax systems has clearly gone up. It looks as if incorporation at earnings even as high as £30,000 will now deliver a very marginal benefit.

I think of it this in the following broad terms. The advantage of incorporation has been that much of the income could be received as a tax-free dividend. Of that £30,000, something like £20,000 could be taken as dividend (using the personal allowance to cover salary).

Next year that £20,000 will create additional tax of £1,125 (£15,000 x 7.5%). That is a significant increase whereas, broadly speaking, the self-employed will see little change. Additional tax at that level would make incorporation much less attractive.

In our heart of hearts we all know some taxpayers who could not cope with operating through a company. The additional hassle of dealing with benefits in kind, loans to participators and company returns is often a nightmare for them, and hence for advisers.

With the tax benefits of incorporating being reduced (and I expect them to be further reduced in the coming years) there is a lot to be said for them to remain as self-employed.

Other changes

The dividend tax was not the only small business measure. Personal service companies are back on the agenda.

There is not only the decision to withdraw the employment allowance for one-person companies, but yet another review of the IR35 provisions to “find a solution which protects the Exchequer and improves fairness in the system”.

So where does this leave us? As I have said many times over the years the system for taxing small businesses lacks any coherence.

What we have is the result of various strands of the tax system designed for different purposes all crashing together on the small businesses that are the lifeblood of the economy.

This creates complexity and administrative burdens. We need a system designed specifically for small businesses and which addresses the triangle of tensions outlined above.

http://www.taxation.co.uk/taxation/Articles/2015/07/13/333367/all-change

Highlights Budget 2015

The Budget was announced last week, here is the edited version of the speech

This week we accept the recommendations of the Low Pay Commission that the National Minimum Wage should rise to £6.70 this autumn, on course for a minimum wage that will be over £8 by the end of the decade. We have already taken steps to curb the size of the very largest pension pots. But the gross cost of tax relief has continued to rise through this Parliament, up almost £4 billion. That is not sustainable.

So from next year, we will further reduce the Lifetime Allowance from £1.25 million to £1 million. This will save around £600 million a year. Fewer than 4% of pension savers currently approaching retirement will be affected. However, I want to ensure those still building up their pension pots are protected from inflation, so from 2018 we will index the Lifetime Allowance. We have had representations that we should also restrict the Annual Allowance for pensions and use the money to cut tuition fees.

I am also today amending corporation tax rules to prevent contrived loss arrangements. And we’ll no longer allow businesses to take account of foreign branches when reclaiming VAT on overheads – making the system simpler and fairer.

We will close loopholes to make sure Entrepreneurs Relief is only available to those selling genuine stakes in businesses. We will issue more accelerated payments notices to those who hold out from paying the tax that is owed. And we will stop employment intermediaries exploiting the tax system to reduce their own costs by clamping down on the agencies and umbrella companies who abuse tax reliefs on travel and subsistence – while we protect those genuinely self-employed.

We’re giving more power to Wales. We’re working on a Cardiff city deal and we are opening negotiations on the Swansea Bay Tidal Lagoon. The Severn Crossings are a vital link for Wales. I can tell the House we will reduce the toll rates from 2018, and abolish the higher band for small vans and buses. It’s a boost for the drivers of white vans.

The legislation devolving corporation tax to Northern Ireland passed the House of Lords yesterday. We now urge all parties to commit to the Stormont House agreement, of which it was part.

Science and innovation

Our creative industries are already a huge contributor to the British economy – and today we make our TV and film tax credits more generous, expand our support for the video games industry and we launch our new tax credit for orchestras. Britain is a cultural centre of the world – and with these tax changes I’m determined we will stay in front. And we’ll invest in what is known as the Internet of Things. This is the next stage of the information revolution, connecting up everything from urban transport to medical devices to household appliances. So should – to use a ridiculous example – someone have two kitchens, they will be able to control both fridges from the same mobile phone. All these industries depend on fast broadband. We’ve transformed the digital infrastructure of Britain over the last five years. Over 80% of the population have access to superfast broadband and there are 6 million customers of 4G that our action made possible.

Small business

In two weeks’ time, we will cut corporation tax to 20%, one of the lowest rates of any major economy in the world. This April we will abolish National Insurance for employing under 21s; Next April we will abolish it for employing a young apprentice; And I can confirm today that 1 million small businesses have now claimed our new Employment Allowance.

From this April we’re also extending our small business rate relief and our help for the high street. But in my view the current system of Business Rates has not kept pace with the needs of a modern economy and changes to our town centres, and needs far-reaching reform. Businesses large and small have asked for a major review of this tax - and this week that’s what we’ve agreed to do.

The boost I provided to the Annual Investment Allowance comes to an end at the end of the year. However, I am clear from my conversations with business groups that a reduction to £25,000 would not be remotely acceptable – and so it will be set at a much more generous rate.

Today I’m announcing changes to the Enterprise Investment Schemes and Venture Capital Trusts to ensure they are compliant with the latest state aid rules and increasing support to high growth companies.

We set up the Office of Tax Simplification at the start of this Parliament and I want to thank Michael Jack and John Whiting for the fantastic work they have done. To support five million people who are self-employed, and to make their tax affairs simpler, in the next Parliament we will abolish Class 2 National Insurance contributions for the self-employed entirely.

12 million people and small businesses are forced to complete a self-assessment tax return every year. It is complex, costly and time-consuming. We will abolish the annual tax return altogether. Millions of individuals will have the information the Revenue needs automatically uploaded into new digital tax accounts. A minority with the most complex tax affairs will be able to manage their account on-line.

Duties

I have no changes to make to the duties on tobacco and gaming already announced. Last year, I cut beer duty for the second year in a row and the industry estimates that helped create 16,000 jobs. Today I am cutting beer duty for the third year in a row – taking another penny off a pint. I am cutting cider duty by 2% - to support our producers in the West Country and elsewhere. And to back one of the UK’s biggest exports, the duty on Scotch whisky and other spirits will be cut by 2% as well. Wine duty will be frozen.

Fuel

I am today cancelling the fuel duty increase scheduled for September. Petrol frozen again. It’s the longest duty freeze in over twenty years. It saves a family around £10 every time they fill up their car

Personal Allowance

In two weeks’ time it will reach £10,600 The personal tax-free allowance will rise to £10,800 next year – and then to £11,000 the year after. That’s £11,000 you can earn before paying any income tax at all. It means the typical working taxpayer will be over £900 a year better off. It will rise from £42,385 this year to £43,300 by 2017-18. So an £11,000 personal allowance. An above inflation increase in the higher rate. A down-payment on our commitment to raise the personal allowance to £12,500 and raise the Higher Rate threshold to £50,000. An economic plan working for you. And in this Budget the rate of the new transferable tax allowance for married couples will rise to £1,100 too. That’s the allowance coming in just two weeks’ time to help over 4 million couples – help that they would take away, but we on this side are proud to provide.

Savings

First, we will give five million pensioners access to their annuity. For many an annuity is the right product, but for some it makes sense to access their annuity now. So we’re changing the law to make that possible. From next year the punitive tax charge of at least 55% will be abolished. Tax will be applied only at the marginal rate. And we’ll consult to ensure pensioners get the right guidance and advice. So freedom for five million people with an annuity.

Second, we will introduce a radically more Flexible ISA. In 2 weeks’ time the changes I’ve already made mean people will be able to put £15,240 into an ISA. But if you take that money out – you lose your tax free entitlement, and so can’t put it back in. This restricts what people can do with their own savings – but I believe people should be trusted with their hard earned money. With the fully Flexible ISA people will have complete freedom to take money out, and put it back in later in the year, without losing any of their tax-free entitlement It will be available from this autumn and we will also expand the range of investments that are eligible.

Third, we’re going to take two of our most successful policies and combine them to create a brand new Help to Buy ISA. And we do it to tackle two of the biggest challenges facing first time buyers – the low interest rates when you build up your savings, and the high deposits required by the banks. The Help to Buy ISA for first time buyers works like this. For every £200 you save for your deposit, the Government will top it up with £50 more. It’s as simple as this – we’ll work hand in hand to help you buy your first home. This is a Budget that works for you. A 10% deposit on the average first home costs £15,000, so if you put in up to £12,000 – we’ll put in up to £3,000 more. A 25% top-up is equivalent to saving for a deposit from your pre-tax income – it’s effectively a tax cut for first time buyers. Access for pensioners to their annuities. A new Flexible ISA.

Today I introduce a new Personal Savings Allowance that will take 95% of taxpayers out of savings tax altogether. From April next year the first £1,000 of the interest you earn on all of your savings will be completely tax-free. To ensure higher rate taxpayers enjoy the same benefits, but no more, their allowance will be set at £500.

Budget 2014 19 March 2014

This is an edited version of the speech, to see the full speech go to https://www.gov.uk/government/speeches/chancellor-george-osbornes-budget-2014-speech

So in this Budget we make sure hardworking people keep more of what they earn – and more of what they save. Yesterday we set out our support for parents with tax free childcare. Today support for savers is at the centre of this Budget, as we take another step towards our central mission: economic security for the people of Britain.

OBR and economic forecasts

A year ago at the Budget the OBR forecast the economy to grow by just 0.6% in 2013. They now confirm that it grew by three times as much. At the Autumn Statement, they significantly revised up their expectations for future growth.

Today I can tell the House they are revising up their forecast again. A year ago, they predicted growth in 2014 would be 1.8%. At the Autumn Statement, 2.4%. Today the OBR forecast growth in 2014 of 2.7%. That’s the biggest upward revision to growth between Budgets for at least 30 years. Growth next year is also revised up to 2.3%. Then it’s 2.6% in 2016 and 2017. And with the output gap closed around a year earlier than previously predicted, growth returns to around its long term trend, at 2.5% in 2018. Taken together, these growth figures mean our economy will be £16 billion larger than was forecast just four months ago. Employment forecasts At home the biggest risk is clear: abandoning the economic plan that is working. And nowhere is the success of that plan more evident than in job creation. 1.3 million more people in work. The latest figures today show a staggering 24% fall in the claimant count in just one year, and the fastest fall in the youth claimant count since 1997. The OBR today forecast one and a half million more jobs over the next five years. Unemployment down from the 8% we inherited to just over 5%.

£1 coin

Of course, the prerequisite of sound money is a sound currency. And, Mr Deputy Speaker, the £1 coin has become increasingly vulnerable to forgery. Now among the oldest of coins in circulation; one in thirty pound coins are counterfeit – and that costs businesses and the taxpayer millions each year. So I can announce that we will move to a new, highly secure, £1 coin. It will take three years. We will consult with industry. Our new pound coin will blend the security features of the future with inspiration from our past. In honour of our Queen, the coin will take the shape of one of the first coins she appeared on – the threepenny bit. A more resilient pound for a more resilient economy.

Fiscal policy

We are taking further difficult decisions now so we can reduce the deficit and protect our NHS and schools and meet our obligations to the world’s poorest by contributing 0.7% of our national income to help them. On public service pensions, we implement the reforms proposed by John Hutton. We will ensure schemes are properly valued, saving the taxpayer over £1 billion a year. We are continuing with pay restraint in the public sector – an essential part of maintaining sound finances and economic stability. We will also insist on the prudent management of departmental finances. Thanks to the efforts of my colleagues in Cabinet, these now regularly come in under budget. In order to lock-in these underspends, I said in December that we would reduce spending by £1 billion in 2015-16. Today, I am making that overall billion pound reduction permanent. And I look forward to the work my excellent colleague the Chief Secretary is now doing, with the Cabinet Office, to find further efficiencies. Difficult decisions on public service pay and pensions. Further savings in departments. A cap on welfare bills. None of these decisions are easy, but they are the right thing to ensure Britain lives within her means.

Welfare

We set out today the details of that welfare cap – and we will seek the support of Parliament for it next week. From housing benefit to tax credits, the full list of benefits included in the cap is published in the Budget document today. Only the State Pension and the cyclical unemployment benefits are excluded. I am setting it at £119 billion in 2015-16. It will rise, but only in line with forecast inflation, to £127 billion in 2018-19. Britain should always be proud of having a welfare system that helps those most in need. But never again should we allow its costs to spiral out of control and its incentives to become so distorted that it pays not to work. In future, any government that wants to spend more on benefits will: have to be honest with the public about the costs, need the approval of Parliament, and will be held to account by this permanent cap on welfare.

Tax avoidance

Thanks to my Right Honourable Friend the Prime Minister’s leadership we have driven the international efforts to develop tough, new global tax rules that stop rich individuals hiding their tax and companies shifting their profits offshore. And the number of registered tax avoidance schemes has fallen by half. And while the vast majority of wealthy people pay their taxes, there is still a small minority who do not. We will now require those who have signed up to disclosed tax avoidance schemes to pay their taxes, like everyone else, up front. I am increasing HMRC’s budget to tackle non-compliance. We will block transfers of profits between companies within groups to avoid tax. We will increase tax credit debt recovery rates for those with sufficient earnings. We will give HMRC modern powers to collect debts from bank accounts of people who can afford to pay but have repeatedly refused to, like most other Western countries. We will increase compliance checks to catch migrants who claim benefits they aren’t entitled to, saving the taxpayer almost £100 million. We will take action to curb potential misuse of the EIS and VCT schemes. And we are expanding the new tax we introduced to stop people avoiding stamp duty by owning homes through a company. We will expand the tax on residential properties worth over £2 million to those worth more than £500,000. And from midnight tonight anyone purchasing residential property worth over half a million pounds through a corporate envelope will be required to pay 15% stamp duty. None of this applies to homes that are rented out. Many of these are empty properties held in corporate envelopes to avoid stamp duty.

So I will continue to direct the use of the LIBOR fines to our military charities and our emergency service charities too. Because the sums continue to grow, I can today extend that support to our search and rescue and lifeboat services – and provide £10 million of support to our scouts, guides, cadets and St John’s Ambulance. I am also today waiving inheritance tax for those in our emergency services who give their lives protecting us. I will also relieve the VAT on fuel for our Air Ambulances and Inshore Rescue boat services across Britain, and provide a new air ambulance for London – all in response to huge and heartfelt public demand and the campaigning of my Hon. Friends for Hexham, Brentford & Isleworth, and Argyll & Bute. Further, this summer, many services of remembrance will be held in our cathedrals to mark the Great War, so we are providing £20 million to support the repairs needed to these historic buildings.

Exports

Mr Deputy Speaker, We’re not going to have a secure economic future if Britain doesn’t earn its way in the world. We need our businesses to export more, build more, invest more and manufacture more. First, exports. Our exports have grown each year and the OBR today forecast rising export growth in the future. Our combined goods exports to Brazil, India and China have risen faster than those of our competitors. With Stephen Green, and now Ian Livingston, we’re expanding the reach and support UKTI offers British businesses. But for many firms the truth is you can only win the contract if you are backed by competitive export finance. Today we fundamentally change that. And we’re going to start with the finance we provide our exporters. We will double the amount of lending available to £3 billion. And I can announce that from today the interest rates we charge on that lending will be cut by a third. We will also reform Air Passenger Duty to end the crazy system where you pay less tax travelling to Hawaii than you do travelling to China or India. It hits exports, puts off tourists and creates a great sense of injustice among our Caribbean and South Asian communities here in Britain. From next year, all long haul flights will carry the same, lower, band B tax rate that you now pay to fly to the United States. Private jets were not taxed at all under the previous government. Today they are, and I’m increasing the charge so they pay more.

One key British export is the North Sea’s oil and gas. We will take forward all recommendations of the Wood report. And we will review the whole tax regime to make sure it is fit for the purpose of extracting every drop of oil we can. We will introduce now a new allowance for ultra high pressure, high temperature fields to support billions of pounds of investment, thousands of jobs and a significant proportion of our energy needs. Even with these measures, the North Sea is a mature basin – and the OBR have today revised down the forecast tax receipts by a further £3 billion over the period. Britain is better together.

Housing

Mr Deputy Speaker, our country needs to export more – and it also needs to build more. House building is up 23%. But that’s not enough. That’s why we’re making further reforms to our planning system and offering half a billion pounds of finance to small house building firms. And it’s why we’re giving people a new Right to Build their own homes and providing £150 million of finance today to support that. It’s why we’re funding regeneration of some of the urban housing estates that are in the worst condition, and we’re extending the current Support for Mortgage Interest Scheme to 2016. And it’s why we’ve got Help to Buy. We’re extending the Help to Buy equity loan scheme for the rest of the decade, so we get 120,000 new homes built. In the South East where the pressure is greatest we’re going to build new homes in Barking Riverside, regenerate Brent Cross, and build the first new Garden City in almost a hundred years at Ebbsfleet. We’re going to build 15,000 homes there, put in the infrastructure, set up the development corporation and make it happen. Taken all together, the housing policies I announce today will support over 200,000 new homes for families.

Investment

Today I have approved a £270 million guarantee for the Mersey Gateway Bridge thanks to the hard work of my Honourable Friend for Weaver Vale.

Tomorrow we introduce legislation to give new tax and borrowing powers to the Welsh Government to fund their infrastructure needs, and they can start now on work to improve the M4 in South Wales. Because of the exceptionally poor weather this winter, I am making an additional £140 million available, on top of that already provided, for immediate repairs and maintenance to damaged flood defences across Britain. Our roads too have taken a battering.

My Honourable Friend for Northampton North has been a persistent campaigner for resources to repair the pot-holes in his constituency and across the country. His persistence has paid off and I’m making £200 million available which local authorities can bid for. I trust Northampton will be making an application. Modern infrastructure is part of a successful economy. So too is a modern industrial strategy.

If Britain isn’t leading the world in science and technology and engineering, then we are condemning our country to fall behind. So we will establish new centres for doctoral training, for Cell Therapy and for Graphene – a great British discovery that we should break the habit of a lifetime with and commercially develop in Britain. To make sure we give young people the skills they need to get good jobs in this modern world, we’ve doubled the number of apprenticeships and I will extend the grants for smaller businesses to support over 100,000 more. And we’ll now develop new degree level apprenticeships too.

Business tax

Today we accept their recommendation to move the collection of Class 2 NICs into self-assessment, abolishing for 5 million people this wholly unnecessary bureaucracy. And we’ve cut business tax rates.

Corporation tax was 28% when we came to office. In just two weeks corporation tax will be down to 21%, high street stores will get £1,000 off their rates, and every business in the country will get the Employment Allowance – a £2,000 cash-back on jobs. Next year, corporation tax will reach 20% and we take under 21s out of the jobs tax altogether. Businesses keeping more of their money to create jobs and invest in the future. Today I want to go further. Many of the enterprise zones we created are now flourishing – so the business rates discounts and enhanced capital allowances will be extended for another three years.

And I can confirm that with the Northern Ireland Executive we’ll establish the first enterprise zone there near Coleraine. I’m raising the rate of the R&D tax credit for loss-making small businesses from 11% to 14.5%.

Two years ago, I launched the Seed Enterprise Investment Scheme to help finance start-ups. It’s been a great success and I’m making it permanent. We’re backing investment into social enterprises with a Social Investment Tax Relief at a rate of 30%. And we’re supporting our creative industries too.

The European Commission has today approved the extension of our film tax credit – and I will apply the same successful approach to theatre, especially regional theatre. From this September there will be a 20% tax relief for qualifying productions, and 25% for regional touring.

And we’re expanding by a third the size of the cultural gift scheme. But I want to do something today that helps all businesses invest.

In 2012 I increased the Annual Investment Allowance ten-fold to £250,000. This generous allowance was due to expire at the end of this year – and all the business groups have urged me to extend it. So we will. But we’ll do more. We’re going to double the Investment Allowance to £500,000, extend it to the end of 2015, and start it next month. 99.8% of businesses will get a 100% investment allowance.

Manufacturing Today, by tilting the playing field – extending the 2% increase in company car tax in 2017-18 and 2018-19 while increasing the discount for ultra low emission vehicles – and reducing the rate of fuel duty on methanol. But above all we are going to have a £7 billion package to cut energy bills for British manufacturers – with benefits for families and other businesses too. First, I am capping the Carbon Price Support rate at £18 per ton of CO2 from 2016-17 for the rest of the decade. This will save a mid-sized manufacturer almost £50,000 on their annual energy bill. Duties So we’re backing exports, backing manufacturing, backing a Britain that builds. And

Mr Deputy Speaker, we also want to help hardworking people keep more of what they earn and of what they save. That’s what we’ve done by freezing council tax, freezing fuel duty and raising the personal allowance to £10,000. And from next year tax free childcare – 20% off, for up to £10,000 of childcare costs for parents.

I can confirm that the fuel duty rise planned for September will not take place. Petrol will be 20 pence lower per litre than it would have been.

Let me turn now to tobacco and alcohol duties. Tobacco duty has been rising by 2% above inflation and will do so again today. Today, I am scrapping that escalator for all alcohol duties. They will rise with inflation, with these exceptions:

Scottish Whisky is a huge British success story. To support that industry, instead of raising duties on whisky and other spirits, I am today going to freeze them. And with some cider makers in the West Country hit hard by the recent weather, I am going to help them by freezing the duty on ordinary cider too. And then there’s beer. I know the industry, led so ably by my Honourable Friend for Burton, have been campaigning for a freeze. But beer duty next week will not be frozen. It will be cut again by 1 pence. Pubs saved. Jobs created. A penny off a pint for the second year running.

Personal allowance

 Mr Deputy Speaker, it is a central part of our long term economic plan that people keep more of the money they have earned. When we came to office, the personal tax allowance was just £6,500. In less than three weeks time, it will reach £10,000. That’s an income tax cut for 25 million people. Today, because we are working through our plan, we can afford to go further. Next year there will be no income tax at all on the first £10,500 of your salary.

I can also confirm today that the higher rate threshold will rise for the first time this Parliament, from £41,450 to £41,865 next month, and then by a further 1% to £42,285 next year.

And because I am also passing the full benefit of today’s personal And I am linking the rate of the transferable tax allowance for married couples to the personal allowance, so it will also rise to £1,050.

Savings And we are going to make the New ISA more generous by increasing the annual limit to £15,000. £15,000 of savings a year tax free – available from the first of July. And I’m raising the limits for Junior ISAs to £4,000 a year too.

So we will launch the new Pensioner Bond paying market leading rates. It will be issued by National Savings and Investments, open to everyone aged 65 or over, and available from January next year. The exact rates will be set in the autumn, to ensure the best possible offer - but our assumption is 2.8% for a one year bond and 4% on a three year bond. That’s much better than anything equivalent in the market today. Up to £10 billion of these bonds will be issued. A maximum of £10,000 can be saved in each bond.

And because 21 million people also invest in Premium Bonds I am lifting the cap for the first time in a decade from £30,000 to £40,000 this June, and to £50,000 next year – and I will double the number of million pound winners.

The tax rules around these pensions are a manifestation of a patronising view that pensioners can’t be trusted with their own pension pots. I reject that. People who have worked hard and saved hard all their lives, and done the right thing, should be trusted with their own finances. And that’s precisely what we will now do. Trust the people. Some changes will take effect from next week. We will:

• cut the income requirement for flexible drawdown from £20,000 to £12,000

• raise the capped drawdown limit from 120% to 150%

• increase the size of the lump sum small pot five-fold to £10,000

• and almost double the total pension savings you can take as a lump sum to £30,000 All of these changes will come into effect on 27 March.

Pensioners will have complete freedom to draw down as much or as little of their pension pot as they want, anytime they want. No caps. No drawdown limits. Let me be clear. No one will have to buy an annuity. But instead of the punitive 55% tax that exists now if you try to take the rest, anything else you take out of your pension will simply be taxed at normal marginal tax rates – as with any other income. So not a 55% tax but a 20% tax for most pensioners. But there is one final reform to support savings I would like to make. Mr Deputy Speaker, There is a 10 pence starting rate for income from savings. It is complex to levy and it penalises low income savers.

Today I am abolishing the 10 pence rate for savers altogether. No tax on those savings whatsoever. And we will almost double this zero-pence band to cover £5,000 of saving income.

This blog is intended for information purposes only and is only advice from past experience, you may have other suggestions of your own. It is not intended to be used to make all of your business decisions but as a guide only.