New Beginnings

Spring is here, the clocks have gone forward, lambing is under way, and the new tax year is upon us!

Here are some of the changes to expect upon the start of the new tax year 2014/15:

1) Basic personal allowance tax band increase to £10,000.

2) The basic rate tax band has reduced to £31,865 (therefore any income earned   above this limit will be subject to 40% income tax).

3) The limit for the small loans exemption has doubled to £10,000 from April 2014.

4) The Capital gains exemption limit for individuals, estates, etc has increased to £11,000 and the exemption limit for trusts has increased to £5,500.

5) ISA Subscription limits will increase to £11,880 for stocks and shares ISA’s and £5,940 for cash ISA’s (Junior ISA and Child Trust fund maximum subscription is £3,840). However, these limits relate only to the period 6th April to 30th June 2014.

From the 1st July 2014, the new ISA subscription will be simplified with the creation of the ‘NEW ISA’ and the overall subscription for the year will be £15,000 for stocks, shares and cash – full transferability in both directions! The Junior ISA and child trust fund will increase to £4,000.

6) The annual investment allowance (AIA) has doubled to £500,000 for qualifying investment in plant and machinery made on or after 1st April 2014 (up until 31 December 2015!).

7) The main rate of corporation tax has reduced to 21% from April 2014.

8) The VAT registration threshold will rise to £81,000 and the VAT deregistration threshold will increase to £79,000, effective from 1st April 2014.

9) National Insurance contributions changes have been summarised in the table below:

14/15 Employee Employer
NICs  rate 12% 13.8%
No NICs on the first £153 pw £153 pw
NICs charged up to £805 pw No Limit
2% NICs on earnings over £805 pw N/A

With Additional Changes:

  • Self-Employed Class 2 : Flat rate £2.75 per week (£143 pa)
  • Self-Employed Small earnings exception £5,885 pa
  • Self Employed Class 4: £7,956-£41,865 pa – 9%; Over £41,865 pa – 2%
  • Class 3 Voluntary Flat rate £13.90 per week (£722.80 pa)

If you would like further details of the expected changes briefly outlined above, please contact Green and co on 01633 871122 or visit our website.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.