James Cowper Kreston's annual Budget presentation which outlines the Chancellors Budget announcement

1. Welcome

2. Peter Whalley
Partner

3. Our Manifesto – Top Three
• Multi-nationals and large corporates should pay fair share
•Diverted profits tax
•Contrived losses
•Criminal sanctions for tax evaders (and advisers)
• Low tax commitment
• Superfast broadband
•Ultra-fast broadband to all households

4. Survey Results Recap 2015
Last year we asked you ‘In March 2015,
what is your forecast for?’

5. CPI Inflation Rate
0 20 40 60 80
0 - 1.9 %
2 - 2.5 %
2.6 - 3 %
3.1 % +
Actual 2015 rate – 0.5%

6. Unemployment in the UK
Actual 1.9 million

7. Price of Petrol
0 8 15 23 30 38
Less than 124
125 - 129
130 - 134
135 - 139
140 - 144
145 - 149
150 +
Actual price – 109p

8. FTSE 100 Index
0
10
20
30
40
5,900 - 6,1006,101 - 6,3006,301 - 6,5006,501 - 6,7006,701 - 6,9006,901 - 7,1007,101 +
Actual – 6,945

9. Let’s hope we can do a bit
better this year!
We asked you ‘In March 2016, what is
your forecast for?’

10. CPI Inflation Rate (currently 0.5%)
0 25 50 75 100
0 - 1.9 %
2 - 2.5 %
2.6 - 3 %
3.1 % +

11. Unemployment in the UK (currently 1.9 million)

12. Price of Petrol (currently 109p)
0 10 20 30 40
Less than 100
101-110
111-120
121-130
131-140
141+

13. FTSE 100 Index (currently 6,945)
0
8
15
23
30
4,500 - 6,1006,101 - 6,3006,301 - 6,5006,501 - 6,7006,701 - 6,9006,901 - 7,1007,101 +

14. When do you expect the Bank of England base rate to increase from 0.5%?

15. Are you better off, worse off or about the same as one year ago and what
do you expect one year from now?
0 30 60 90 120 150
Worse off
Better
About the same
2015
2016

16. Are local businesses better off, worse off or about the same as one year ago
and what do you expect one year from now?
0 25 50 75 100 125
Worse off
Better off
About the same
2015
2016

17. If there was an in/out referendum now on EU
membership, how would you vote?

18. Which party or coalition do you expect to form the next government?
109
11
4
20
3
11
7
1
16
1
1
8
0 30 60 90 120
Cons
Lab
Cons/Lab
Cons/Lib
Cons/SNP
Lab/Lib
Cons + ????
Cons/Lib/????
Cons/UKIP
Cons/Green/UKIP
Lab/UKIP
Labour/SNP

19. Which team do you think will win the 2015 Rugby World Cup?
10
44
1 3 1 7 2
18
9
97
0
25
50
75
100
125
Australia England Europe France Germany Ireland Italy South
Africa
Wales New
Zealand

20. UK Economy
• Growth for 2014 – 2.6% and set to continue
• Debt as % of GDP set to fall from 80% to 72%
• Borrowing of £97.5bn to turn to surplus by 2018/19
• Record employment – 5.3% jobless rate
• Trade deficit best for 15 years
• Living standards higher than 2010
• Householders ‘better off’ during last 5 years
• Inflation projection 0.2%

21. Debt Reduction
• More austerity
•£13bn savings in government departments
•£12bn of welfare savings
• Anti-tax avoidance measures - £5bn
• £13bn of mortgage sales from Northern Rock/Bradford & Bingley
• Sale of Lloyds Bank stake - £9bn

22. SNAP SURVEY
The Chancellor made a lot of reference to the great strides that the
country has made since his emergency budget in 2010
Looking back over your/your clients’ businesses over the last 5 years:

23. SNAP SURVEY
Have your/your clients’ revenues:
1. Increased
2. Decreased
3. Stayed the same?

24. SNAP SURVEY
Have your/your clients’ staff numbers:
1. Increased
2. Decreased
3. Stayed the same?

25. SNAP SURVEY
Have your/your clients’ appetite for investment:
1. Increased
2. Decreased
3. Stayed the same?

26. Alex Nicholson
Business Tax Director

27. “This budget does more to back business”

28. Corporation Tax
10
15
20
25
30
35
2007 2008 2009 2010 2011 2012 2013 2014 2015
Main Rate of corporation tax
Small company rate of corporation tax
Lowest rate in the G7 and joint lowest in the G20

29. Capital Allowances
• Annual Investment Allowance
• Currently £500k until 31 December 2015
• Was to reduce to £25k in 2016 - will be more generous
• Consider timing of capital expenditure
• No change to annual writing down allowances

30. R&D Tax Credits
• Changes announced in the Autumn Statement
• SME scheme rate increases from 225% to 230% from 1 April 2015
• “Above the Line” rate increases from 10% to 11% from 1 April 2015
• Package of measures to streamline the application process
As a reminder.....
• SME tax saving worth £46,000 for each £100,000 spent from April 2015
• Loss making SME £33,350 cash rebate for each £100,000 spent
• A valuable source of funding R&D

31. Patent Box II
• Much touted 10% Corporation Tax rate for profits falling within the
Patent Box
• EU probe cancelled
• But, current regime being phased out even before it’s fully phased in
• Patent Box II replacement – details awaited

32. Employment Taxes
• Employers’ National Insurance
• Abolished for under 21s from April 2015
• Abolished for apprentices aged under 25 from April 2016
• For the self-employed
• Class 2 NI to be abolished in next parliament (Class 4 NI remains)

33. Company Cars
• Tax charges based upon CO2 emissions
• What’s more tax efficient?
BMW i8 hybrid
List price £105k
Ford Mondeo 2.0D
List price £26k
BIK tax rate = 5%
Tax 40% = £174
pm
BIK tax rate = 23%
Tax 40% = £197
pm

34. Company Cars
• Emissions thresholds steadily reducing
• Announced well in advance
• 2019/20 – 3% increase in rates generally, but lower increases for
ultra low emissions vehicles
• Plan ahead when specifying company cars

35. Other Reliefs For Business
• Support for creative/media sector
• Increase in the rate of film tax relief to 25% for all qualifying
expenditure (not just the first £20m as previously proposed)
• New children’s television tax relief from April 2015 at 25%
• New orchestra tax relief from April 2016 at 25%
• Major review of business rates

36. VAT
• VAT registration threshold will increase on 1 April 2015 from £81,000
to £82,000. (Deregistration threshold will increase from £79,000 to
£80,000)
• VAT deductions relating to foreign branches
• Fuel VAT exemption for air ambulances and inshore rescue boats

37. Ian Miles
Private Client Tax Partner

38. The End of the Tax Return?
• Digital tax accounts to replace tax returns
• Commencing in 2016 with 15m, everyone (50m) by 2020
• Will bring together all tax information in one place
• Details of employment income, pensions and interest feed into tax
account
• Additional details to be added
• Can opt to file tax returns
• Can give access to tax agent
• Option to pay tax as you go
• Consultation later this year

39. Income Tax Rates and Allowances
• Personal allowance £10,000 2014/15
£10,600 2015/16
£10,800 2016/17
£11,000 2017/18
• Transferable allowance between spouses to increase in line with the rising allowance
• Basic rate band £31,865 2014/15
£31,785 2015/16
£31,900 2016/17
£32,300 2017/18

40. Income Tax Rates and Allowances
• Full benefit of the personal allowance passed on to higher rate
taxpayers for the first year in 2017/18
• From 2016/17 there will be one personal allowance for all –
regardless of an individual’s age
• All individuals with income of £121,600 in 2016/17 and £122,000 in
2017/18 derive no benefit from increased personal allowance

41. Farmers’ Averaging
• Intense lobbying from stakeholders including National Farmers Union
• Widely fluctuating profits
• Current averaging period: 2 years of profits
• Consultation period to open, with outcome due April 2016
• Consulting with stakeholders to extend the averaging period to 5 years

42. Capital Gains Tax
• Annual allowance £11,000 in 2014/15 £11,100 in 2015/16
• Rates – no change at 18%/28%
• Entrepreneurs’ Relief: associated disposals
• Where selling personal assets used in a business, to qualify for
ER (10% CGT) the individual must also dispose of a minimum of
either:
•5% of company shares, or
•5% of partnership assets

43. Entrepreneurs’ Relief: Joint Ventures
• Clampdown on claims for ER for individuals who enter into a joint
venture, holding only a small stake in a trading company
• Individuals must have a significant stake in a genuine trading
business to benefit from the lower rate of tax
• Deny ER on disposal of shares in a company that is not a trading
company in its own right

44. The way you look you'll qualify for next year's old age pension!

46. Pensions
• Lifetime allowance £1.25m 2014/15 £1.25m 2015/16 £1m 2016/17
• Annual allowance – unchanged at £40k
• Transitional protection from 2016/17
• LA to be indexed annually in line with CPI from 6/4/18
• Annuities – from April 2016 people receiving an annuity can agree to
assign income to a third party in exchange for a lump sum or
alternative retirement product – taxed at marginal income tax rate
(not 55%)

47. Savings
• £1,000 of savings income tax free for basic rate taxpayers
• £500 of savings income tax free for higher rate taxpayers
• Basic rate deduction of tax on non ISA interest withdrawn from April
2016
• ISAs – can withdraw and replace capital in same tax year without
affecting annual ISA investment limits
• Help to buy ISA: First time buyers will receive £50 for every £200 of
savings up to a maximum of £3,000. Must be used to purchase first
home - restrictions on price - £450k in London, £250k elsewhere

48. Inheritance Tax
• No change to the Nil Rate Band which stands at £325,000
• Deeds of Variation
• Consultation on perceived tax avoidance
• Due Autumn 2015
• Generation skipping
• Effective use of NRB
• Will they remain allowable if there is no loss of tax?

49. Deeds of Variation
• Enables beneficiaries of a deceased’s estate to alter the distribution
of that estate
• 2 year limit after date of death
• IHT and CGT advantages, to write the gift back into the will

50. Deed of Variation - example
Husband Wife
Part of Estate
Spouse
exempt
Children
Chargeable

51. Deed of Variation - variation
Husband Wife
Entire Estate
Spouse
exempt
Subsequent
gift - PET
Children

52. Charities
• Increase Gift Aid Small Donation Scheme to £8,000 from £5,000
• Means charities can reclaim £2,000 instead of £1,250

53. Peter Whalley
Partner

54. Household
• Beer duty – down 1p
• Cider – down 2p
• Wines – frozen
• Spirits – down 2%
• Tobacco – 2% above RPI
• Fuel duty – frozen

55. SNAP SURVEY
Do you think that this budget will:
1. Increase business confidence
2. Undermine business confidence
3. Have no effect

56. SNAP SURVEY
Regardless of political party, who would make the best next Prime Minister?
1. David Cameron
2. Ed Miliband
3. David Miliband
4. Nick Clegg
5. Nigel Farage
6. Boris Johnson
7. Vince Cable
8. Natalie Bennett
9. Alex Salmond
10.Jeremy Clarkson (in the market for a new job apparently)

57. Thank you for
attending

58. 58