Budget 2014: What does it mean for WAHMs?
On 19th March 2014 the Chancellor of the Exchequer, George Osborne, delivered his regular Budget speech in time for the new financial year in April. Each Budget brings in a new set of legislation for us to grapple with and as work at home parents who straddle the employment and staying at home camps, it can be interesting to see which measures benefit us and which don’t.
Below the different, relevant sections of the budget have been looked at to see how they’ll benefit self-employed mums.
In the beginning of his speech Osborne stated that is was Budget for ‘makers, doers and savers’ and that it was organised to ensure that ‘hardworking people keep more of what they earn and more of what they save’. Let’s see how his measures stack up.
General Working and Living
The main changes to general taxation and working and living costs come in the form in another rise in the personal tax allowance to £10,500. If you’re registered as self-employed or perhaps run a small business alongside being an employee this is relevant to you as it means you can earn an additional £1,060 in 2014/15 before reaching the tax threshold
The other key change introduced in this Budget is to childcare, relevant to many work at home parents. The new childcare tax breaks will be replacing the current voucher scheme and has been loosely described as a new system of “20% off” in terms of tax. It now works out that the benefit would be worth £2,000 per child, which is up from the maximum saving available through the voucher scheme at £1,516.
The main problem with the new scheme is that it excludes families where one parent stays at home to look after the children. This means if you double up as a stay at home mum or dad as well as a work at home parent you won’t qualify. The scheme is planned to come into effect from September 2015.
Boost for Business
Osborne’s Budget also plans to help British businesses by doubling the annual investment allowance up to £500,000 from the end of 2015 and offering the best export finance package available in all of Europe. This should benefit manufacturing businesses in the UK who produce products for the European or global market.
Osborne additionally included a cut in energy bills for manufacturers worth £7bn which should by proxy result in slightly lower energy rates for the general public.
Budget for Savers
The biggest surprise of the Budget was Osborne’s announcement that Britain’s savers can get even more out of their savings accounts. ISA savers can now benefit from a £15,000 annual cap rather than £11,520 and this £15,000 can be 100% cash if needed whereas previously it could be no more than half.
The ability to save more could give your family more chance of reaching the position you want it to be in and it’s also a positive for those looking to buy their first home or even business premises but need to save to get the that point.
Significant changes have been announced to the pensions system making it more flexible and manageable. Osborne pledged that no one would be forced to buy an annuity anymore and the opportunity to take an income from a pension has been made simpler. There was also an increase in the amount that can be taken from small pension pots – up to £10,000.
One of the elements of the Budget that has got most people talking is the brand new £1 coin. Designed to make it virtually impossible to forge or counterfeit the new coin will have twelve sides and be constructed from two different metals. It looks nothing like our current coin and there have already been complaints that all the supermarket shopping trolleys will need changing!
This is Osborne’s penultimate Budget and it seems to have its high and low points. Work at home mums and dads may feel the childcare measures don’t go far enough but for now, that’s what we’ve got to work with!