Freelancers' Questions: Did Budget 2015 affect freelancers' finances?

Freelancer’s Question: How did Budget 2015 affect freelancers’ personal finances?

Expert’s Answer: Other than the abolishment of Class 2 NICs, and the proposal to scrap self-assessment tax returns, the main announcements at Budget 2015 of relevance to freelancers and self-employed professionals are as follows:

Help to Buy ISA

First time buyers will get help from the government to save for a deposit on a house, for every £200 you put in to the ISA, the Government will put in £50.

Fully flexible ISA

People will have complete freedom to take money out and put it back in to their ISA without losing their tax entitlement

Tax free savings

Basic rate taxpayers will be able to combat low returns on cash savings thanks to a £1,000 tax free allowance on any returns on savings held outside of an ISA.

Pensions allowances

The lifetime pensions allowance reduced to £1million from £1.25million from next year. No change to the annual allowance. Also regarding pensions, a consultation has begun on proposals to allow retirees to sell their current annuities and take advantage of the new pension flexibility rules to cascade wealth down through the generations.

Personal allowance

This is due to rise from £10,000 to £10,600 from April this year.

Petrol

The fuel duty increase that was expected to come in September has been cancelled, resulting in what is now the longest freeze in fuel duty in over twenty years. This will apparently save the average family £10 every time they fill up. Plus, the fuel duty accelerator mechanism has been removed completely, which freelancers who are ‘on the road’ a lot will welcome.

Beer

Duty on beer will be cut by a penny per pint and Cider, Scotch whisky and other spirits will be cut by 2%. Bad news for wine drinkers though, as their tipple will remain at its current level!

The expert was Tony Harris of Freelancer Money, an IFA to freelance, contract and self-employed professionals.

 

19th March 2015

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