Parents in work can now share responsibility for looking after their newborn or newly adopted child as Shared Parental Leave law becomes effective 5 April 2015.

Eligible couples whose child is due on or after Sunday 5 April 2015 can now share up to 50 weeks of leave and 37 weeks of pay in the first year of their child’s life. Couples who adopt a child can share the same benefits as parents to the first year of the child’s adoption.

Parents can take the time off at the same time as each other or separately. An estimated 285,000 couples a year will be able to take advantage of this change in the law. Shared parental leave and pay are only available in England, Scotland and Wales.

To work out what you may be entitled to you’ll need to know:

• your employment status (eg employed or worker)
• the date you started your current job
• the date you finished work (if you’ve finished)
• how much you earn
• when you want your leave to start
• how much leave you want to take

You’ll need the same information about your partner if you plan to share the care of the child with them.

• The Corporation Tax rate has been reduced to 20%
• The new Diverted Profits Tax has been introduced
• The bank levy has increased from 0.156% to 0.21%
• Air Passenger Duty has been restructured – abolishing bands C and D
• Hospice charities, blood bikes, search and rescue, and air ambulance charities will be eligible for VAT refunds
• Business rates changes (England only):
  • The business rates multiplier has increased from 48.2p to 49.3p (47.1p to 48.0p for small business multiplier). This includes the 2% inflation cap
  • The Small Business Rate Relief scheme has doubled for a further year – providing 100% relief for businesses with a single property with a rateable value of less than £6,000, and tapered relief with a rateable value of £6,000 – £12,000
  • The business rates discount for shops, pubs, cafes and restaurants with a rateable value of £50k or below has increased from £1,000 to £1,500
• The cultural test for high-end TV tax relief has been modernised and the minimum UK expenditure requirement for all TV tax reliefs has reduced from 25% to 10%
• A new tax relief on the production of children’s television has been introduced
• The amount of banks’ annual profit that can be offset by carried forward losses has been restricted to 50%
• Two new bands for the Annual Tax on Enveloped Dwellings (ATED) have been introduced
• Capital Gains Tax exemption for wasting assets will only apply if the corporate selling the asset has used it in their own business
• An investment allowance for North Sea oil and gas, replacing the existing offshore field allowances and simplifying the existing regime, has been introduced
• A reduced rate of fuel duty to methanol will apply – the rate is 9.32 pence per litre
• Fuels used to generate good quality electricity by CHP (combined heat and power) plants for onsite purposes are exempt from the Carbon Price Floor
• Climate Change Levy main rates have increased in line with RPI
• The VAT registration threshold has increased from £81,000 to £82,000 and the deregistration threshold from £79,000 to £80,000
• Scottish government’s Land and Buildings Transactions Tax (LBTT) will replace Stamp Duty Land Tax in Scotland
• The associated companies rules have been replaced with simpler rules based on 51% group membership
• The standard and lower rates of landfill tax have been increased in line with RPI

In an effort to streamline and simplify the administration of the Self Assessment tax system HMRC is planning to open digital accounts for fifty million taxpayers by 2020. When completed, these taxpayers will no longer be required to submit Self Assessment tax returns to HMRC.

Instead, HMRC will gather information from employers, pension providers, banks and building societies, and automatically post data regarding salaries, benefits, pensions and investment income to the digital accounts.

It is still not clear how information regarding property income, capital gains, business profits and other chargeable income or gains will be gathered by HMRC, although it has been mooted that it will be possible to link business accounting software with the digital accounts by 2020.

This is a radical shift from the present “gathering and filing” processes that presently places the responsibility for the make-up and lodgement of Self Assessment data on the taxpayer. In some respects it harks back to the days prior to Self Assessment when HMRC used to issue assessments to taxpayers, who were then obliged to check the numbers.

 Information published so far by HMRC indicates that:

• Taxpayers, and their agents, will be able to access their digital accounts to make real time changes to data and pay their tax.
• Fifteen million taxpayers will be set up with digital accounts as early as 2016 with the remainder given access to their digital accounts by 2020.

 More details are needed in order to assess the impact of these changes and HMRC have advised they will publish this later this year.

It will be interesting to see how the change will impact associated issues such as late filing penalties. Hopefully, HMRC will abandon these charges for taxpayers where little or no tax is due.

The Government will also need to consider digital exclusion: how are they going to accommodate taxpayers who cannot easily access the internet for various reasons?

The National Minimum Wage rates from 1 October 2015, as recommended by the Low Pay Commission. (LPC) will be:

• a 20p (3%) increase in the adult rate (from £6.50 to £6.70 per hour)
• a 17p (3%) increase in the rate for 18 to 20 year olds (from £5.13 to £5.30 per hour)
• an 8p (2%) increase in the rate for 16 to 17 year olds (from £3.79 to £3.87 per hour)

The National Minimum Wage rate for apprentices will increase by 57p (20%) from £2.73 to £3.30 per hour. The LPC recommended an increase of 2.6% to £2.80 in the apprentice rate.

The Government is also putting employers in control of the funding for apprenticeships by introducing a new digital apprenticeship voucher. Vouchers can be used to reduce or eliminate training costs with appropriate providers.

Apprenticeship vouchers will further simplify things for employers and give them the purchasing power to fund apprenticeship training.

The employer would register their details on a system being developed by the Skills Funding Agency including their type of business, the details of the apprentice and the apprenticeship standard being signed up to. The discounted rate, which could be up to 100% for 16 to 18 year olds, at which employers can purchase training, would be calculated and the employer would be able to pass on the voucher code to the provider that is delivering the training. The provider would then reclaim the value of the voucher from the Skills Funding Agency.

The new flexibility, that certain pension pot holders can avail themselves from 6 April 2015, offers more opportunity regarding the funds they have saved. Once you reach minimum pension age, normally 55, you will be able to:

• leave your pension fund invested, no change; 
• enter drawdown, thereby taking some of your money whilst leaving the rest where it is; 
• withdraw cash in one or a number of lump sums; 
• purchase an annuity; 
• go with a combination of all of the above; 
• or take your entire pension pot in one go. 

Additionally, from April 2016, people who already have an annuity will be able to effectively sell it on, so that they too can benefit from the pension freedoms announced at last year’s Budget.

Currently, people who have bought an annuity are unable to sell it without having to pay at least 55% tax on the proceeds of the sale. From April 2016, the tax rules will change so that people who already have income from an annuity can sell that when they choose and will pay their usual rate of tax they pay on income, instead of 55%.

With so many options to choose from, and a variety of tax traps to avoid, there has never been a more compelling time to seek professional advice BEFORE you make any decisions.

There were a number of changes to promote savings in the Budget. The main changes are set out below:

• Help to Buy ISA

From autumn 2015, a new ISA is being launched that will enable first time buyers to save for their deposit. An initial deposit of £1,000 is allowed with additional monthly savings of up to £200.

The Government will top up these savings by 25% up to a maximum of £3,000 (when deposits by the saver reach £12,000).

The bonus can only be put towards a first time buy of up to £450,000 in London or £250,000 elsewhere.

• ISA flexibility

 From autumn 2015, ISA savers will be able to withdraw and replace money from their ISAs without using up their ISA subscription limit.

• Personal savings allowance

From April 2016, basic rate taxpayers will not have to pay tax on the first £1,000 of interest received on savings, and higher rate (40%) taxpayers will not have to pay tax on the first £500 of interest received. The allowance will not be available to additional rate (45%) income taxpayers.

• Premium Bonds investment limit

This limit is increased from £30,000 to £50,000 on 1 June 2015.

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