Those who make use of questionable tax avoidance schemes will now have to “pay their taxes, like everyone else, up front”, the Chancellor said, adding that the number of registered tax avoidance schemes operating in the UK had dropped by half in 2013.
Those who are not forthcoming in paying their tax, he noted, may soon find HMRC helping itself to the money, under proposed new powers that will enable the Government to collect debts from the bank accounts of people who can afford to pay taxes but have repeatedly refused. This, Osborne said, would bring Britain into line with most other Western countries.
HMRC’s budget for pursuing tax evasion is also to be increased, the Chancellor said, without saying by how much.
Osborne said he was also going after companies that make use of transfers between parts of the same corporate entity in order to avoid tax.
Budget for savers and pensioners
Osborne began his Budget speech today by saying that he had crafted a budget aimed at savers and pensioners, and then went on to deliver just that – with a raft of tax and rule changes he said would let savers keep more of the money they earned.
One measure that will be seen as potentially affecting many wealthy individuals who live outside the UK involves expanding the 15% stamp duty on residential properties purchased through companies to homes that are worth £500,000 or more, from a previous floor of £2m. This will take effect "from midnight tonight", Osborne said.
Other key points contained in Osborne's Budget:
- The personal income tax allowance is being raised to £10,500, meaning that no one need pay tax on the first £10,500 they earn
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The income threshold for entering the 40p income tax bracket will rise to £41,865 from £41,450 next month, and by a further 1%, to £42,285, next year
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Cash and stock ISAs will be merged to create a single so-called "New ISA"
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The limit for ISAs will be increased to £15,000, while the limit for Junior ISAs also will rise, to £4,000
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Certain existing restrictions on pensioners’ access to their pension pots are to be lifted; pensioners will now have more freedom to access their savings, reducing, Osborne said, the need for an annuity
- The taxable part of a pension pot taken as cash on retirement will now be charged at the normal income tax rate, down from 55%
As reported, a consultation of stakeholders on the idea of requiring those involved in tax disputes that involve an avoidance scheme that HMRC considers to be the same as one it was defeated in court last month.
To read and download the full Budget statement from the Treasury's website, click here.
