Taxation Brief Summary

Taxation Brief Summary

Financial Services including Accountancy, Tax, VAT, Business Support & Start-Ups, Essex

As always this years tax changes left some better off and others not so much, as reported by the BBC news website. New rules affecting income tax, pensions, student loans, inheritance tax, council tax, savings and benefits were announced.

Income Tax

The rate of income tax rose in line with inflation, to allow those earning less than £11,850 per year to avoid paying tax. This saves them £70 a year, while higher tax payers can earn up to £46,350 before paying that level of tax, saving them £336 per year.

Minimum Wage

The national minimum wage rose noticeably by more than the rate of inflation, and was the most generous towards the 18 – 20 year old age bracket with a 5.3% salary rise.

Pensions

Workers with auto enrolment pensions can now expect to pay in more monthly contributions, but will benefit from increased employer contributions and tax relief. This could eventually earn them more in retirement to the tune of up to £17,000 per year.

Student Loans

Those with pre 2012 student loans to pay back can now earn up to £18,330 before having to start repayments, this is a jump from £17,775. Post 2012 loans are in an even better position, and are allowed to earn £25,000 as opposed to £21,000

Inheritance Tax

Inheritance tax will be less hefty, benefiting those who own a home, making the additional property exemption rise from £100,000 to £125,000.

Council Tax

Most homes were hit by substantial rises in council tax, as councils were allowed to raise council tax by up to 5.99%. This rise also affects those with social care responsibilities who will pay up to 3% more.

There is nothing exciting to report about savings with no major changes, and as expected, charges for things like water, prescriptions etc are set to increase. We have over 30 years experience in financial services, so to talk about how these changes will affect you call us at Culwick on 01268 680702.

Chartered Accountant, Over 30 years Experience in Financial Services, Basildon, Billericay, Hockley, Essex