We are at the start of the new tax year, this is the best possible time to take stock of the tax allowances and rates that affect a high proportion of adults in the UK, particularly in the light of recent Budget announcements.
For more detailed, personal information and insights, our accountancy team are happy to help you to audit and plan for 2017/18. But here are some pointers for the coming tax year.
This is the amount of money you can earn before you pay tax. One of the recent changes is that the personal allowance in England and Wales is increasing from £11,000 to £11,500. In Scotland, the basic rate tax threshold is increasing from £32,000 to £33,500.
What does this mean to the average basic rate taxpayer? It puts around £100 more in your pocket each year.
The income limit for Personal Allowance remains static at £100,000. The maximum married couple's allowance has risen by £90 to £8,445.
There is good news for higher earners, as the threshold for paying 40% tax is increasing by £2,000 to £45,000.
This is the allowance that enables basic rate taxpayers to earn up to £1,000 on their savings account, without paying tax on it. Higher rate taxpayers can earn up to £500 in interest before it is taxed.
From April, it will not just include bank and savings accounts, but also interest payments from corporate bonds and gilt funds. This is an automatic process that is part of your tax return.
The government is trying to find different ways to encourage people to save more effectively. This includes a new Lifetime ISA which you use if you are aged between 18 and 40 as a long-term savings plan.
The idea is that it can help more people get their first step on the property ladder, or enjoy their retirement. Therefore, money can be withdrawn from a Lifetime ISA without penalty to buy a first property (if it is under £450,000) or after the age of 60 to support retirement.
ISA allowances are going to increase – the maximum will go from £15,240 in the current tax year to £20,000 in 2017/18.
This is again an encouragement for people to enjoy the benefits of carefully saving, particularly as the long-term rewards can be substantial.
For more detailed advice, please do get in touch with us by email at This email address is being protected from spambots. You need JavaScript enabled to view it. or call 01623 490120.
Haidee is our Personal Tax Director and is a fully qualified tax adviser, having achieved the ATT qualification in 2006. Tax efficiency being her main concern. Specialising in taxation, Haidee provides clients with advice on personal tax, PAYE services, VAT and social security. She also provides guidance to new start-up businesses.
Call us today on01623 490120
or email info@watsonk.co.uk
When you first start a business, your focus is usually on attracting customers, generating sales and building a successful company. Few business owners spend much time thinking about how or when they will eventually leave the business.
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