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Marriage allowance

If you are married or in a civil partnership, and born on or after 6 April 1935 you can now apply for the new marriage allowance. This is not an extra amount of tax free allowance, but a transfer of £1,060 of unused personal allowance from one spouse or civil partner to the other. It will save the couple tax of £212 for 2015/16.

The marriage allowance can only be claimed where one person has unused personal allowance and the other partner/spouse is taxed at no more than 20%….

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Birthday surprise

Do you know when your younger workers will reach their key birthdays: 18 and 21? It is essential to know exactly when these dates fall, as reaching such a milestone will change the level of national minimum wage (NMW) which must be paid to that worker. The current and proposed NMW hourly rates are:

Age or status of employee: From 1 October 2014 From 1 October 2015
21 and over £6.50 £6.70
18 to 20 £5.13 £5.30
Under age 18 £3.79 £3.87
Apprentices under 19 or in 1st year £2.73 £3.30

An employee’s pay must be increased from the beginning of the pay period…

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Charities and tax

If you help to run a charity you need to keep on top of the tax and audit regulations that apply to charities, and the gift aid scheme.

A person with earnings or pension income of less than £10,600 and interest of up to £5,000 will pay no income tax in 2015/16. These individuals should not make gift aid declarations for donations made on or after 6 April 2015, as they do not pay the income tax which the charity reclaims in respect of that donation.

As a charity you…

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Pension freedom or liberation?

Pension freedom is a GOOD thing. The change in law from 6 April 2015 means that members of defined contribution pension schemes who are aged 55 or more should be able to draw what they want from their pension schemes. But “pension liberation” is a BAD thing. This is when scammers use confidence tricks to separate taxpayers from their pension savings, and the taxpayer has to pay high charges and tax penalties. Can you tell the difference?

If you are thinking about taking funds from your pension plan, you…

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Budget March 2015 – Download our free guide (PDF)

In this analysis we have mainly concentrated on the tax measures that will directly affect individuals, employers and small businesses.

We are committed to ensuring all our clients don’t pay a penny more in tax than is necessary.

If you have any questions or would like one-to-one advice tailored to your needs, please call us on 01792 466 428 or email [email protected].

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Company cars

Does your company still own or lease the car you use for private journeys? You may need to rethink that arrangement in light of the tax charges due to apply in the years ahead.

From 6 April 2015 all company cars will generate a tax charge for the driver and the employer, even electric cars will be taxed on 5% of their list price. The taxable benefit for other low emission vehicles (51-75g/kg) will leap up from 5% to 9% of the vehicle’s list price. The taxable benefit for…

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Child benefit claw-back

If you or your spouse/partner claim child benefit, and at least one of you has adjusted net income of £50,000 or more for the year, the highest earner must declare the benefit on their tax return in order to pay back part or all of the child benefit as a tax charge.

HMRC is writing to taxpayers who it thinks should have paid the child benefit tax charge for 2013/14, but didn’t. Unfortunately some people who have received such letters are childless, or haven’t claimed child benefit for decades.

If…

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RTI penalties

Last month we warned you about the penalties coming into effect for late filed RTI reports. The good news is that HMRC are cutting employers just a little slack, and will now allow three extra days in which to submit the full payment submission (FPS) report.

Normally the FPS must be submitted on or before the day the employees are paid, but there are some circumstances in which the FPS can be submitted up to 7 or 14 days later. For example, the FPS can be submitted within 7…

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Salary, dividend or pension contribution?

When you work for your own company you can decide how much salary to pay yourself, how much to pay into your pension fund, and what proportion of the remaining profits to take as a dividend. The split is important as it will affect the tax and national insurance payable by you and your company.

A salary just sufficient to be covered by your personal allowance (£10,600 for 2015/16), will be tax free, assuming you have no other income. However, if your company has more than one employee (including…

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Unpaid Self Assessment Tax Surcharge Imminent

If you have not made arrangements to settle your outstanding self-assessment tax, which was due for payment on 31 January 2015, penalties could be levied by HMRC.  In order to avoid a 5% surcharge being levied on your balancing payment for 2013/14, payment will need to be made no later than 2 March 2015.  HMRC is taking a very stringent approach with taxpayers with little clemency for late payment. The easiest method to settle the outstanding tax is via…

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