The Chancellor’s Budget provided welcome news to savers. Basic rate tax payers will have the first £1,000 of interest exempt and higher rate tax payers the first £500. This will not apply to additional rate tax payers. As a result banks and building societies will no longer be required to deduct tax at source from individual tax payers. It will also mean most Credit Union members will not have to tell HMRC about their Credit Union dividends.
George Osbourne also announced plans to stop the requirement for many individuals to complete self assessment tax returns. Instead individuals would have digital tax accounts. The details of these accounts will not be released until later this year. It is believed that the accounts will have details of income populated from sources such as banks. It will be interesting to see if there is any additional reporting requirement for Credit Unions when the plans are announced. There has been no mention of further reporting for Credit Unions but if the digital tax account aims to take information from banks then this is a possibility in the future.
As expected the main rate of corporation tax rate dropped to 20% (for the tax year 2015/16 )and is now at the same level as the lower rate of corporation tax. For further details regarding the Budget please see our guide.