Wish you were here: what was missing from Budget 2014?

Pat Dugdale

The announcements today by the Chancellor included surprises, confirmed many predictions but some topics were notably absent.

Income tax rates – no major review

Recent debates on income tax rates have been highly political and will continue to be so as we approach the election. The Chancellor has increased the personal allowance by £500 for 2015/16 but has resisted calls to amend income tax bands in any meaningful way. Presumably it is difficult for him to do so because over the life of this parliament increases to the personal allowance have been significant. As a result more people fall within the 40% band but most are still better off.

The Chancellor may have held back on substantive changes to income tax rates or thresholds in order to make a headline grabbing change next March.

Corporation tax – no significant reductions

Despite its prominence in recent budgets, the Chancellor made no significant changes to the corporation tax regime this time round. Notably he did not bring forward the introduction of the 20% corporation tax rate to next year, so we still have to wait until 2015/16 for equalisation of the small and large company rates.

Capital gains tax

This budget was billed as a budget to encourage investment but the Chancellor did not mention (or improve) entrepreneurs’ relief. Many would agree that entrepreneurs’ relief is generous, but useful changes might have been made to the 5% threshold and the employment test. Perhaps one for Budget 2015.

There was no detail on the proposed extension of the capital gains tax regime to non-residents on gains arising on the disposal of UK residential property. This is set to apply from April 2015, although we are promised a consultation “shortly”.


Given the recent rapid rise in house prices, SDLT has become a popular topic of conversation across the UK. The current “slab” system of SDLT is seen by many as unfair in that it distorts house prices at the boundaries of each band. Additionally, the bands have not been amended for a number of years. Many commentators were therefore predicting changes to, or a consultation on, the SDLT regime. The fact that Scotland will be moving to a progressive charge (the Land and Buildings Transaction Tax) has only fuelled calls for amendment of the current SDLT system.

Other areas

There will be some disappointment that proposed changes to the taxation of members of LLPs will not be deferred (despite calls from the House of Lords to do so). Also, that there will be no softening of the proposed new corporation tax “debt for equity” swaps regime.

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