Chancellor of the Exchequer Archives | Page 2 of 2

Highlights from the Chancellor’s Budget, 18 March 2015

March 19, 2015/in 2015, 2016, 2017, Accountancy, Annual Allowance (AA), Annual Investment Allowance, Band rates, Budget, Chancellor of the Exchequer, Flexible ISA, George Osborne, Help to Buy ISA, Higher rate tax payers, HM Revenue and Customs, HMRC, Income tax, Investments, ISAs, National Insurance, National Minimum Wage, NI, NI Class 3, NIC, Personal allowance, Personal Savings Allowance, Self-assessment, Self-employed, Tax, Tax advice, Tax allowance, Tax bands, Tax returns/by Mark

Along with some encouraging news about the UK economy, some interesting new measures were announced in the Chancellor’s Budget yesterday and below we highlight those which we feel will directly impact the majority of UK taxpayers:

As widely forecast, the tax-free allowance will increase. The amount people can earn before paying tax will rise to £10,800 from 2016-17 and then to £11,000 from 2017-18. At the same points in time, higher earners will also receive a two stage increase to the threshold at which they start to pay a 40% rate of tax, with the threshold increasing to £43,300 by 2017-18.
The Chancellor also announced a brand new Personal Savings Allowance whereby the first £1,000 of interest (£500 for higher rate taxpayers) will be tax tree. This new allowance will kick in from April 2016 and will take 95% of taxpayers out of savings tax completely. (Fact Sheet available here).
Another new scheme announced was the introduction of a new ‘Help to Buy ISA’ aimed at prospective first time buyers. This fairly generous scheme means that the Government will chip in up to £50 extra per month (up to a ceiling of £3,000) when an eligible saver saves up to £200 per month towards their first home. (Fact Sheet available here).
In another ISA reform, savers will now be able to withdraw money from a new Flexible ISA and deposit it back later in the same financial year without losing any of their usual ISA tax benefits. £15,240 will be able to be put into this re-styled savings vehicle. Read more

How the Chancellor’s 2014 Autumn Statement affects YOU!

December 5, 2014/in 2014, Accountancy, Accountants, Chancellor of the Exchequer, Chancellor's Autumn Statement, Corporation tax, Dulwich, George Osborne, ISAs, London, National Insurance, NI, NIC's, Personal allowance, Rates, SME, South London, Stamp Duty, Stamp Duty Land Tax, Tax, Tax avoidance, Tax bands, Taxes, thresholds, Tulse Hill, Value Added Tax, VAT/by Mark

George Osborne, the Chancellor of the Exchequer, announced his Autumn Statement on Wednesday (3 Dec 2014) in what could be seen as a mini budget. Here we focus on the key announcements, concentrating on those relating purely to taxation, as it is those which affect you, our customers, most directly.

1). First some good news: The UK is seeing the fastest growth out of all the G7 countries, and the number of people employed is at its highest point ever. This is good for all of us because it restores optimism in the UK economy, higher employment speaking for itself.

2). As we announced in a separate blog post, Stamp Duty (Land Tax) has been given a major shake-up and, for anyone buying a house for £935,000 or less, the amount of Stamp Duty which they’ll have to pay will be less, and sometimes very significant. See our separate blog post and infographic for more detail.

3). In the financial year 2015-16, the tax-free personal allowance (which is the amount you can earn before you start to pay any tax) will increase to 10,600 which is an increase of £600. So … more tax-free money in your pocket, which is good.

4). Economy flights will become cheaper for under 12s from 1 May 2015 and under 16s from 1 March 2016, because their tickets will become exempt from tax on those dates. So … a small concession, but another welcome one. Average 4-person families will save £26 for flights within Europe and £142 on flights to the U.S.

5). From 3 December 2014, spouses will be able to inherit their partner’s ISA benefits should their partner pass away. Currently this is not the case and the change will mean that, from 6 April 2015, the surviving spouse or civil partner will be able to Read more

Infographic: Stamp Duty Changes: Good News for Most!

December 5, 2014/in 2014, Accountancy, Buy to let, Chancellor of the Exchequer, Chancellor's Autumn Statement, George Osborne, Land and property, Landlords, Lettings, Lettings income, Stamp Duty, Stamp Duty Land Tax, Tax, Tax bands, thresholds/by Mark

In what, for most of us, is very welcome news, the Chancellor announced a significant tidy-up of Stamp Duty in his Autumn Statement yesterday. The changes will mean that 98% of those who pay Stamp Duty will save money — and potentially a significant amount. We believe that this is a fairer system, with the richest contributing the most and, in effect, counterbalancing the savings which will be made by those buying any property for less than £937,500.

So how will this affect you?

HM Treasury have released a rather useful infographic which, with the aid of examples, gives you a good idea of the savings you will make if the property you are buying costs less than £937,500 … or for richer people the extra you’ll pay if the property price is above that threshold.

So how does it work?

In the old Stamp Duty rules you had to pay a single Stamp Duty rate based on the entire value of the property being purchased. This meant sometimes hugely differing amounts of Stamp Duty being levied for sometimes similar property prices (depending on which side of the tax band threshold an individual house price fell). With the new tax bands, however, buyers will pay Stamp Duty at a rates applied to only the part of the property price falling within each tax band, rather like happens with income tax.

Here are the tax bands and the rates which apply:

You can also try the Read more

Record haul by HMRC in tax avoidance crackdown

July 11, 2014/in 2014, Accountancy, Accountants, Chancellor of the Exchequer, Chancellor's Autumn Statement, Dulwich, Enquiry meeting, George Osborne, HM Revenue and Customs, HMRC, Income tax, Inland Revenue, London, Records, revenue determination, SME, South London, Tax, Tax accountant, Tax accountants, Tax advice, Tax advisers, Tax enquiry, Tax fraud, Tulse Hill, Undeclared income/by Mark

Back in January we reported that HMRC had raised an extra £20.7 billion in additional revenue for the financial year 2012-13 as a result of it’s drive on tax compliance and a massive crackdown on tax avoidance by organisations and individuals alike. Now we can confirm that the financial year 2013-14 figures are in and HMRC has increased their haul to £23.9 billion in additional tax for the year – an all time record and one which represents 5% of the total tax yield for the year. This is an increase of £3.9 billion on the year before and it’s up a whopping £9 billion compared to 3 years ago. George Osborne will be doubly pleased because this year’s figure also beats the target he set in his Autumn Statement by £1 billion clear.

Of the £23.9 billion raised in these latest figures, £8 billion is derived from large businesses, £1 billion from criminals and a further £2.7 billion is the result of successfully tackling tax avoidance schemes in the courts. That leaves £12.2 billion which we Read more

HMRC’s ‘Direct Recovery’ of owed tax – straight from your bank account!

May 15, 2014/in Accountancy, Accountants, Advice, Budget, Chancellor of the Exchequer, HMRC, Income tax, Inland Revenue, penalties, Tax, Tax accountant, Tax accountants, Tax advice, Tax advisers, Tax affairs, Tax agents, Tax bill, tax inspector, Tax liability, Taxes/by Mark

Part of the Chancellor’s recent Budget included plans to recover tax owed to the Treasury direct from the debtor’s bank account — all done directly and without a Court Order being necessary. This has been criticised widely but HMRC says that only 17,000 people in the UK per year would fall into this potential scenario and that it would only occur for those owing more than £1,000 in unpaid tax or tax credits owed. Moreover they say that they would only target long-standing tax debts from those who had received a minimum of 4 payment demands and whose bank and savings accounts combined had a minimum total balance of £5,000 or more remaining after any tax bad been directly seized. Also the debtor involved will have been issued with a final warning period of 14 days, during which the funds concerned would be frozen, before any tax was directly withdrawn.

Meanwhile many, including the Treasury Committee, have raised concerns by stating that it is well-known that HMRC make mistakes including, for example, sometimes asking for the wrong amount of tax from people, issuing incorrect tax cards, or worse. Similar mistakes applied through the new ‘Direct Recovery’ of tax from bank and savings accounts could be seriously detrimental to people and Read more

The Chancellor’s Budget, March 2014

March 20, 2014/in 2014, AIA, Annual Investment Allowance, Annuities, Budget, Capital gains tax, CGT, Chancellor of the Exchequer, George Osborne, Higher rate tax payers, IHT, Income tax, Inheritance Tax, Interest rates, ISAs, NISAs, pension contributions, pension scheme, Pensions, Personal allowance, savings income, Stamp Duty, Tax, Tax allowance, Tax bands/by Mark

The Chancellor, George Osborne, has now presented his March 2014 Budget to Parliament. There was lots of talk about the economy, growth forecasts, supporting UK businesses and employment – as well as some obvious political spin bearing in mind the European and General Elections are just around the corner – however we thought we’d concentrate on the most important changes, mainly in relation to tax itself as that’s what is going to affect Taxfile customers and readers the most. So here is our snapshot:

For individuals:

The threshold before earnings are subject to income tax (the ‘tax-free personal allowance’) is set to rise to £10,500;
The higher rate of tax will kick in for earnings above £41,865 from April 2014, rising again to £42,285 in 2015;
The first part of the ‘Help to Buy’ equity loan scheme for those aspiring to buy a new home is to be extended until 2020 (previously 2016);
The Stamp Duty on homes worth over £500k is to increase to 15% for those which are bought by companies;
Inheritance tax will be scrapped for members of the emergency services who “give their lives protecting us”;
Cash and Shares ISAs will be merged into a single New ISA (“NISA”). The annual tax-free limit for the NISA will be £15k (£4k for junior equivalent) from 1 July 2014.
From April 2015, pensioners will no longer be forced to buy an annuity with their pension fund. They will now be able to cash in as much or as little as they want to from their pension pot.
From June 2014, the amount people will be able to invest into Premium Bonds will increase to £40k (from £30k). From 2015 this will rise again to Read more

How the Chancellor’s 2014 Autumn Statement affects YOU!