Figures recently published by the Office for National Statistics show that unemployment has dropped below 7% for the first time since the recession and employment has seen the biggest annual jump in a generation. Unemployment fell by 77,000 in the last 3 months, taking the unemployment rate to 6.9% for the first time since 2009. In the largest annual rise in nearly...
Government announces extension for pension decision period
The government announced recently that people who have recently taken a tax-free lump sum from their defined contribution pension will be given 18 months rather than 6 months to decide what they wish to do with the rest of their retirement savings, and will not be put at a disadvantage should they wish to wait to access their pension savings...
Radical proposal to change private residence relief
At present, it is possible to make an election, in certain circumstances, allowing owners of more than one residential property to choose which property is their main residence. In this way a measure of Private Residence Relief (PRR) can be achieved for the elected property. This process of swapping properties for tax purposes achieved notoriety during the MPs’ expenses scandal...
Office for Budget Responsibility (OBR) issues conflicted information
It would seem that economic indicators confuse economists as well as the rest of us. The first two paragraphs of the recently published Executive Summary of the OBR makes for interesting reading. Here’s a bullet point summary: The UK economy has continued to recover. In the final quarter of 2013, GDP growth matched our December forecast, inflation fell back to target and unemployment...
Don\’t forget to claim Employment Allowance
Employers are reminded to claim the £2,000 Employment Allowance which commenced 6 April 2014. Basically, employers can reduce their National Insurance contributions by a maximum £2,000 in the current tax year. Here’s the instructions on claiming the allowance as posted on GOV.UK’s website: “You can use your own 2014 to 2015 payroll software (see your software provider’s instructions), or HM Revenue and...
Lifestyle victory for taxi driver and his family
Glen Whittle must be feeling pleased with the outcome of his recent appeal against assessments issued by HMRC. An enquiry instigated by HMRC resulted in the issue of assessments on the basis that the income of Mr & Mrs Whittle was insufficient to meet their outgoings. HMRCs argument centred on the level of household and holiday costs. Fortunately, Mr & Mrs Whittle...
What has changed since the Budget?
For those born after 5 April 1948 the personal tax allowance is £10,000. It was also announced that from 6 April 2015 this would increase to £10,500. The much publicised change to the taxation of salaried members of Limited Liability Partnerships is confirmed. Ongoing vigilance is required to ensure that salaried members’ tax status does not change from self-employed to PAYE...
What has not changed since the Budget?
Entrepreneurs’ Relief As long as the ownership of your business is structured correctly, and for a minimum time period, then lifetime disposals not exceeding £10m will only be taxed at 10% for Capital Gains Tax purposes. Cap on tax reliefs Don’t forget that certain tax reliefs are capped at £50,000 or 25% of your income. The reliefs affected are predominantly tax losses. There...
HMRC is changing the way they charge interest on late paid PAYE
Employers should note that HMRC is changing the way they charge interest on unpaid PAYE from 6 April 2014. We have reproduced below HMRC’s recent Helpsheet: For the tax year 2014-15 onwards: HMRC will charge in-year, rather than annual, interest on all unpaid: PAYE tax and Class 1 National Insurance, including specified charges (estimates HMRC makes in the absence of a PAYE submission) Construction...
State Pension and tax
If you have recently started to receive your State Pension, you may, or may not, have noticed that it is paid without deduction of tax. This can have a number of unforeseen tax consequences: If your total income including your State Pension is less than your personal tax allowance then there is no tax to pay and you can spend your...