The Budget

RJMS Health Care Accountants COVID-19 summary of government offers & business support guide.

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Savings and Pensions

ISA limits

The ISA investment limit for 2018/19 will remain unchanged at £20,000 per year. The limit for a Lifetime ISA is also unchanged at £4,000. The limit for Junior ISAs and Child Trust Funds increases from £4,128 to £4,260.

Pension contributions (Table B)

The limit on contributions to tax-advantaged pension schemes remains £40,000 per year for those with income up to £150,000 (£110,000 if the pension contribution is paid in addition to salary by an employer). The limit is tapered away as income increases above £150,000, until it is only £10,000 when income reaches £210,000. The limit is also reduced to £4,000 for anyone who has accessed ‘flexible income drawdown’ from an existing pension fund.

The lifetime allowance (LA) is the maximum amount that a person can save in tax-advantaged pension schemes. The value of benefits is measured against the LA when benefits are first taken from a pension, and also on some other occasions, including the individual’s 75th birthday. The LA was reduced from £1.25 million to £1 million with effect from 6 April 2016. It will increase in line with inflation to £1.03 million from 6 April 2018. 

Tax-advantaged venture capital schemes

The Enterprise Investment Scheme (EIS), Seed Enterprise Investment Scheme (SEIS) and Venture Capital Trusts (VCTs) offer a range of tax advantages for investment in companies, but are subject to a bewildering range of conditions and rules. These have been subject to a review which has led to a number of changes to be introduced from 6 April 2018. Some of these are intended to move VCTs towards investment in higher risk companies.

The main impact on individual investors is an increase in the annual limit for investment in EIS companies from £1m to £2m, provided that any amount over £1m is invested in one or more knowledge-intensive companies. The rules for such companies will also be modified to make it easier for them to raise money under the EIS.