Regulation  

Budget Expert Allowances & NI:Sue Moore, technical manager, Institute of Chartered Accountants in England & Wales

Budget Expert Allowances & NI:Sue Moore, technical manager, Institute of Chartered Accountants in England & Wales

Pensions, national insurance and tax evasion all featured prominently in the 2015 Budget announcement.

Yet more changes to pensions were announced, most of which had been trailed before the Budget speech. Up to 5m annuitants can sell the right to their income for a lump sum from April 2016 and only suffer tax at their marginal rate rather than the current minimum tax rate of 55 per cent. The annuitants will be able to access the lump sum using the pension freedoms enacted in the Pension Act 2014.

As expected, the lifetime allowance will be reduced to £1m, and presumably there will be another raft of protections available, such as fixed protection and individual protection.

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Meanwhile, the annual allowance limit of £40,000 and the tax relief allowed remain unchanged. The chancellor cited police officers, teachers and nurses as being affected if the annual allowance were restricted.

It is worth noting that from April, class 2 national insurance is being collected by means of self-assessment rather than as a separate six-monthly payment. The chancellor has announced that in the next parliament he would abolish class 2 and reform class 4.

The chancellor has also announced that the government will take a power under which financial intermediaries will be required to notify their UK-resident customers with overseas accounts to inform them about the common reporting standard, the penalties for evasion and the opportunities to disclose.

A limited life disclosure facility will be introduced from 2016 to mid-2017 ahead of the OECD’s common reporting standard in 2017.