- From 6 April 2015, personal allowances increased for people born after 5 April 1948 to £10,600.
- From 6 April 2015 age allowance for older people born between 6 April 1938 and 5 April 1948 abolished –replaced with the personal allowance. For taxpayers born before 6 April 1938 age allowance remains unchanged at £10,660.00. Also age allowance earnings limit increased to £27,700.
- New 0% starting savings only rate introduced – for savings up to £5,000.Taxable non savings income does not qualify for this rate.
- From 6 April 2015 additional tax rates are 40% for income between £31,786.00 and £150,000.00 and 45%, beyond this. The dividend additional rate stays at 37.5%.
Pension and Savings
- New 0% starting rate of tax on the first £5,000 of savings income from 6 April 2015, with a tax saving of £500 per year.
- Adult NISA annual investment limit increased to £15,240 and Child NISA limit increased to £4,080.00. New legislation to allow cash NISA withdrawals and repayments back into the NISA, not affecting subscriptions limits.
- As from 6 April 2016, basic rate taxpayers will have their first £1,000 of savings income exempt from income tax. Higher rate taxpayers will only have their first £500 of savings income exempt. Additional rate taxpayers with income over £150,000 will have no exemption on savings income.
- From 6 April 2016 a reduction in Pension scheme lifetime allowance from 6 April 2016 from 1.25 million to £1 million. Unprotected pension pots exceeding £1 million will be subject to a 55% tax rate.
- Proposals for persons in receipt of an annuity to be able sell that annuity to a 3rd party taking proceeds immediately or as a drawdown over several years.
- Proposed scheme for first time house buyers to save in special “Help to Buy” NISA with Government boosting savings by additional £50 for every £200 saved up to a maximum of £3000. Bonus to be paid when funds are withdrawn to purchase first property
- No change to 40% and 36% death rates or 20% chargeable lifetime transfers rate. Nil rate band of £325,000 remains unchanged.
Capital Gains Tax
- No change in tax rates of 10%, 18% or 28%. Small increase in annual exemption by £100 to £11,100 for individuals and personal representatives, with £50 increase to Trustees’ from £5,500.00 to £5,550.00.
- Non UK resident individuals, trusts, personal representative of deceased person and certain non-resident companies, owning UK residential property will be liable to capital gains tax on all disposals made on or from 6 April 2015. Payment due within 30 days of exchange unless seller has an existing self-assessment record with HMRC.
Business tax (Self-employed, LLP and partnerships)
Effective from 1 April 2014 for companies and 6 April 2014 for unincorporated businesses
- Annual Investment Allowance to remain doubled to £500,000 until 31 December 2015. From 1 January 2016 the allowance reduces to £25,000.
- Farmers and writers profits averaging -from 6 April 2016 the period over which profits can be average increases from 2 to 5 years.
- Inflationary increases in taxation rates for company cars and provision of private fuel costs to employees effective from 6 April 2017.
- From 6 April 2016 the £8,500 PA earnings threshold for benefits in kind received will be abolished. The employer’s Class 1a NIC treatment will follow the income tax treatment.
- From 6 April 2016 certain low-value benefits in kind will be considered trivial and exempt to income tax.
- Pure business expenses provided to employees will be treated as automatically exempt as from 6 April 2016, making dispensations unnecessary.
- For taxable benefits normally reportable on P11D such as company cars & fuel, medical insurance and memberships, employers can now from 6 April 2016 opt to tax these benefits via the company payroll via the Real Time information (RTI) payroll reporting system.