Personal landlords with mortgages or loans on residential lets will be aware of the restriction on the amount of tax credit relief that can be claimed on interest paid. Usually, this amount is 20% of the interest paid in any one year. However, there are circumstances where a further restriction (a ‘cap’) may apply. The ‘cap’ is 20% of the lower of the:
– interest claimable in the tax year
– profits of the business for the tax year; and
– the landlord’s adjusted total income (after losses…
The ‘High Income Child Benefit Charge’ applies to an individual with income over £50,000 where either they or their partner received child benefit in the tax year or someone else received the benefit for a child living with them and they contributed at least an equal amount towards the child’s upkeep. Where both partners together have income greater than £50,000, the charge is levied on the higher earner; if their income is the same, the person who receives the child benefit pays the charge. ‘Partner’ does not have…
Many employed taxpayers receive their wage slips at the end of every week/month and assume that the figures are correct – that the Code being used is correct. As a result, taxpayers may not realize that the amount of tax deducted by the end of the tax year is wrong. If that code is 1257L for 2022/23 then that is probably right – any other code needs further investigation.
Under the PAYE ‘Real-Time Information’ scheme employers report to HMRC electronically before making any salary or wage payments using Code…
New Class 2 NIC rules – make sure you don’t miss out on your state pension
One of the more welcome measures in the Chancellor’s Spring Budget was the alignment of the National Insurance Contributions (NIC) thresholds for individuals with the personal income tax allowance. For 2022/23, self-employed individuals will be required to pay class 2 and class 4 NIC on profits above £11,908; from 2023/24 both class 2 and 4 NIC will be payable on profits above £12,570 per year.
However, this change brings a conundrum for those self-employed…