Chancellor George Osborne announced the Budget on 19 March 2014.
Here is a round up of all the key announcements impacting employee benefits:
- 2014 to 2015: more flexibility to be allowed for employees retiring with defined contribution pensions.
- From 27 March: maximum lump sum taken from a pension pot increased to £30,000 from £18,000.
- From 27 March: number of small individual pension pots from which 100% lump sums can be taken increased to three.
- From 27 March: tax-free amount that can be taken out of small individual pension pots as a cash lump sum increased to £10,000, from £2,000.
- From 27 March: trivial commutation limits increased from £18,000 to £30,000.
- From 27 March: amount member can drawdown each year will be increased from 120% to 150% of an equivalent annuity.
- From 1 July: annual individual savings account (Isa) allowance increased to £15,000, allowing staff transferring exercised employee shares to protect more of their gains over the tax-free limit.
- To spring 2015: fuel duty will remain frozen.
- From 1 April 2015: new employer contribution levels for several public sector pension schemes introduced.
- From April 2015: proposed that employees no longer have to purchase an annuity.
- From April 2015: proposed that any cash lump sum taken over the 25% tax-free amount will be taxed at the person’s marginal tax rate and not at 55%.
- From April 2015: government to guarantee free face-to-face advice for all employees that retire in DC pension schemes.
- From April 2015: personal allowance increased to £10,500 a year.
- Ongoing: government to consult on four tax simplifications: abolishing the £8,500 threshold; voluntary payrolling of benefits; a trivial benefits exemption and a general exemption for non-taxable expenses.
- Ongoing: transfer ban to be introduced to prevent employees transferring out of public sector defined benefit pension schemes.
- To 2016: Pay awards for most public sector workers limited to 1%.
- From 2017 to 2018: company car tax rates will increase by two percentage points for cars emitting more than 75g of carbon dioxide per kilometre.