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The HMRC have introduced a simplified method for the Self-Employed and those earning income from UK property to complete their tax returns, the ‘Three Line Account’.
So long as your annual turnover from self-employment or income from UK property is below the VAT registration threshold, which is currently £81,000, you are entitled to use the Three Line Account.
Using this method, all that needs to be provided on the relevant pages of your tax return are:
• the details of your business
• the turnover in the tax year
• the overall total of allowable business expenses
• the net profit or loss (which is calculated automatically if the tax return is completed online)
• the details of any adjustments, allowances claimed or losses brought forward.
However, this is optional and, if you prefer, the full breakdown of your expenses can still be submitted.
There is often confusion on what to include in the turnover of a business for the year. As a result, we have added ‘What is Turnover?’ into our Guide section at https://cooperfaure.co.uk/what-is-turnover/.
From the 2013-14 tax year, sole traders and partnerships with an annual turnover below the VAT registration threshold qualify to use the ‘Simpler Income Tax’ method. This allows the business to report on a cash basis and, for certain types of expenses, flat rate allowances can be used rather actual costs.
A more detailed review of the Simpler Income Tax method will feature in our newsletter next week.
At CooperFaure, we have extensive knowledge of personal tax matters. If you would like assistance with your tax affairs, please contact welcome@cooperfaure.co.uk to arrange an initial free consultation.
Whether you are self-employed or earn income from property in the UK, turnover means the total income earned from your business during the tax year.
For the self-employed, this includes:
• cash and cheques received.
• bank transfers and deposits received.
• card payments received.
• tips, fees and commissions.
• the value of any payments ‘in kind’ for work that you have done.
• the value of work that you have done that has been bartered for reciprocal goods or services provided by your customer.
• the value of any stock or goods that you have taken from the business without payment for use by you, your family or your friends.
• money owed to you at the accounting year-end date (unless you are operating under the Simpler Income Tax system).
For those earning income from property in the UK, this includes:
• income from any land that you own or lease out.
• income from any property that you let.
• any rent over £4,250.00 (for a full tax year) from a furnished room in your own home.
Turnover does not include:
• money received from the sale of a piece of equipment or machinery that you have previously owned and used in your business.
• money received from the sale of business premises.
• Business Start-Up Allowance or Enterprise Allowance.
It is important to remember that your turnover is not necessarily just the total of the money you have received. If you have bartered goods or services or accepted non-monetary payments, the monetary value of these need to be included in your turnover.
At CooperFaure, we have extensive knowledge of personal tax matters. If you have any questions on your circumstances, please contact welcome@cooperfaure.co.uk to arrange a free consultation.
If you receive Tax Credits, these normally need to be renewed each year.
However, you may be sent a letter from HMRC stating that the Tax Credits will be renewed automatically. In this case, there is no action required so long as the details are correct.
You are only able to renew your Tax Credits when you have a Renewal Pack from HMRC. These Renewal Packs are currently in the process of being distributed and should be delivered by 30th June.
Unless you started claiming Tax Credits after 6th April this year, if you have not received the Renewal Pack by then, you need to call the Tax Credit Helpline on 0345 300 3900.
If your Renewal Pack contains an Annual Declaration and there are no changes to report, you can usually renew online at https://www.gov.uk/renewtaxcredits.
For this, you will need:
– Your National Insurance number.
– your 15 digit ‘Tax Credits Renewal number’ found on the bottom right of your Annual Declaration.
– your total income (including your partner’s, if applicable) for the last tax year.
– the details of the benefits you or your partner received in the last tax year.
You are unable to renew online if code on the bottom left of your declaration is ‘TC 603 D 2’.
If you are unable to renew online, you can either call the Tax Credit Helpline or post the completed form to:
HM Revenue and Customs Tax Credits, Comben House, Farriers Way, Netherton, L75 1WB
The standard deadline for submitting the renewal is 31st July but this will be confirmed in your Renewal Pack. If this deadline is missed there is a risk that the Tax Credits will stop.
The Tax Credit Office will send you an Award Notice within eight weeks of receipt of your renewal detailing the amount of Tax Credits that you will be due.
If you are unsure of your situation, please contact welcome@cooperfaure.co.uk to arrange an initial free consultation.
A question that we are often asked is “What Makes a Company Car a Pool Car?”
The following five conditions must all be fulfilled for a car that is provided by a company to be considered to be a Pool Car:
– The car is made available to, and actually used by, more than one of the employees;
– The car is made available, in the case of each of those employees, by reason of the employees’ employment;
– The car is not ordinarily used by one of the employees to the exclusion of others;
– In the case of each of the employees, any private use of the car made by the employee was merely incidental to the employee’s other use of the car in that year; and
– The car is not normally kept overnight on or in the vicinity of any residential premises where any of the employees are residing, except as part of a business journey.
If these provisions are met, there is no taxable benefit for the employees that drive the company car.
Earlier in the year, a First Tier Tax Tribunal between In Vinyl Design Limited and HMRC tested whether the cars provided by the company were, indeed, Pool Cars.
The Tribunal ruled that all five conditions are “essentially a question of fact” and must all be satisfied and, in this case, the company failed on three counts:
– There was no textual evidence to show that the cars were not ordinarily being used by one employee to the exclusion of the others;
– There was no documentation to show that private use of the cars was prohibited; and
– The cars were normally kept overnight at the employees’ homes.
On the third point, In Vinyl Limited argued that the cars had been kept by the employees due to the risk of vandalism or theft. However, the Tribunal ruled that this is irrelevant when it comes to satisfying the conditions for a car to be a Pool Car.
In view of this ruling, our four key recommendations to validate that a car is a Pool Car are:
– Keep a Travel Log for each Pool Car detailing the date of use, the employee using the car, the mileage and the primary reason for the travel.
– Provide Insurance Cover that allows all company employees to be potential drivers and, where possible, that stipulates ‘business mileage only’.
– Ensure that there is a written Pool Car Policy that specifically prohibits private use of the vehicles.
– Prevent a car being habitually kept overnight by an individual employee.
If you are unsure as to whether you are meeting the conditions for a Pool Car, please contact welcome@cooperfaure.co.uk to arrange a free consultation.
The latest group to come under scrutiny from HMRC are those individual taxpayers who are earning a second untaxed income.
As a precursor, the HMRC have launched the Second Incomes Campaign that provides the opportunity for any employed taxpayer who is resident in the United Kingdom and who has additional untaxed income to bring their tax affairs up-to-date.
Essentially, any payment an individual receives either from the provision of services or for trading in goods is taxable income.
Most frequently the source of a second income is from one of the following categories:
– consultancy fees – for instance for the provision of training or IT support.
– payments for organising parties or events.
– providing services such as taxi driving, hairdressing or fitness training.
– the making and selling craft wares.
– trading goods at market stalls, car boot sales or online platforms.
On this last category, it is important to emphasize that selling personal possessions is not deemed to be trading. However, it can be difficult to judge where the break point is. As a result, we have added ‘Are You Trading?’ into our Guide section at https://cooperfaure.co.uk/are-you-trading/.
If you are earning income in any of the above areas that is not being taxed at source and is not already being declaring in your Self-Assessment Tax Return, the HMRC is urging you to make a Voluntary Disclosure.
As an incentive, the HMRC is offering preferential terms through their Second Incomes Campaign which will reduce the level of penalties applied.
The first step is to submit a Notification Form that you wish to participate in the campaign. Thereafter, you will have four months to submit a Disclosure Form and to pay the amount due.
There is also the possibility to negotiate an extended payment term during this four month period.
The risk of not making a Voluntary Disclosure is that, should the HMRC find out that you owe tax, they will levy substantial penalties and, potentially under new powers in the 2014 Finance Bill, will be able to seize the money owed directly from your bank account.
At CooperFaure, we have extensive knowledge of personal tax matters. If you are unsure as to whether you have a second income or have any questions on your circumstances, please contact welcome@cooperfaure.co.uk to arrange a free consultation.
The economic downturn has led to more and more people using online auction websites, car boot sales or market stalls to sell items.
This does not automatically mean that you are trading and would, therefore, need to be registered for tax and, possibly, VAT. However, it can difficult to identify the point where trading starts.
As a rule, the HMRC would consider you to be trading if the following conditions apply:
– you want to make a profit.
– you have bought items to sell them on.
– you sell items often or regularly.
– you register as a business seller on an internet auction site.
– you sell from a market stall.
– you buy items wholesale or through trade suppliers.
– you change or improve items before selling them on.
– you sell items that you have just bought.
– you sell items that are related to another business that you run.
– you have borrowed money to pay for the items that you are selling and you have to repay the loan.
Generally, you would not considered to be trading if the following conditions apply:
– you only sell items to cover your costs.
– you sell a personal possession, something that you have been given or have inherited.
– you only make sales occasionally.
– you are not registered as an online shop or trader on an auction site.
– you make no changes or improvements to the items that you sell.
– you occasionally sell a personal possession that you have acquired or bought some time ago.
At CooperFaure, we have extensive knowledge of personal tax matters. If you are unsure as to whether you are trading or have any questions on your circumstances, please contact welcome@cooperfaure.co.uk to arrange a free consultation.
The ongoing steep increase in house prices is starting to cause a real concern that the UK economic recovery could be undermined.
The average marketed price of a property in London has risen by an astonishing £80,000 since the start of the year with the average price in the capital now exceeding £590,000 for the first time.
Across England and Wales as a whole, the marketed price is 8.9% higher than a year ago, at an average of just over £270,000, which is nearly at the growth level in autumn 2007 just before the crash.
Over the weekend, the governor of the Bank of England, Mark Carney, warned of “deep, deep structural problems” in the UK property market with the main problem being that not enough new homes were being built.
The fear of the effects of the potency of property price rises in London has led to calls for the Bank of England to intervene.
In addition, there is pressure on the government to modify the Help to Buy scheme by reducing the upper threshold of property value from the current level of £600,000.
Last night in a pre-emptive move, the largest mortgage lender in the UK that accounts for 20% of new mortgages, the Lloyds Banking Group announced that loans would be capped at four times the level of a borrower’s income for mortgages over £500,000. Previously, their lenders including Halifax, Cheltenham & Gloucester, Birmingham Midshires and the Bank of Scotland, had frequently lent at much higher income ratios, particularly in London.
Although the consistent low level of interest rates is chiefly cited as the main factor fuelling the property price boom, it is worth looking at the London borough with the largest increase in property prices over the last year, Tower Hamlets, which covers Canary Wharf.
In the last year, property prices have increased by 43% but this has been driven by investors buying in Canary Wharf and the surrounding areas. Moreover, around two-thirds of these have been purchased outright for cash with no mortgage.
There is a clear risk that these moves by the government and banks will open up the London property market further to investors rather than cooling the increase in prices and, as a result, the London bubble will continue.
If you would like more detailed guidance on the impact of these changes or have a specific question, please contact welcome@cooperfaure.co.uk to arrange a consultation.
The 2013-14 tax year ended on 5th April 2014 and the last date for submitting your tax return for this period is 31st January 2015.
As a result, the common natural instinct is not to even start thinking about this until after Christmas!
However, there are benefits from submitting your tax return early to HMRC.
If you are likely have tax to pay, the HMRC will be able to tell you how much. The payment deadline remains 31st January 2015 so there is the opportunity to set money aside for this over the upcoming months.
If you are likely to be due you a tax rebate, the HMRC will start processing the paperwork on receipt of your tax return.
For our clients, we operate an online portal to submit the Tax Return to HMRC which means we can confirm the amount of tax due to be paid or the tax rebate due as part of the process.
If a portion of your income is paid as an employee under PAYE, the date by which your employer must provide you with a P60 is 31st May.
Similarly, if you receive taxable benefits from your employer, the date by which they must provide you with a P11D is the 6th July.
For the companies where we administer the payroll, the 2013-14 P60s have already been issued and we will be preparing and distributing the P11Ds, if applicable, later this month.
Tomorrow we will be emailing our clients with details of the additional information required and the proposed fees for this service.
However, if you are unsure as to whether you need to complete a tax return or have a specific question, please contact welcome@cooperfaure.co.uk.
In January, the HMRC published a consultation document, Tackling Marketed Tax Avoidance. Two of areas covered in this proposed anti-avoidance strategy were Employee Benefit Trusts (EBTs) and Contractor Avoidance where contractors used offshore intermediaries and EBTs who make loans in place of remuneration to avoid Income Tax and National Insurance Contributions.
The gist of the proposal was that, where the HMRC are able to issue a ‘Follower Notice’ to someone whose case is the same or “substantially similar” to a case already decided in HMRC’s favour by a tribunal or court, the taxpayer will be required either to settle their dispute or to pay the tax in dispute where the dispute is not settled.
An Accelerated Payment Notice will be issued alongside the ‘Follower Notice’ which would have a ninety-day response time and the payment would be due at the end of this period unless a settlement is agreed with HMRC.
Two key points within the proposal were that, as HMRC will have issued a ‘Follower Notice’ on the grounds that, in HMRC’s opinion, the tribunal or court has decided the substantive issue, there would be limited grounds for the taxpayer to challenge the Accelerated Payment Notice (an error in process) and this procedure would apply to open Self-Assessment tax assessments which are under appeal.
Despite receiving representations from legal and tax experts such as The Chartered Institute of Taxation who, whilst agreeing with the principle of ‘Follower’ cases, stated that “However, the way of achieving this should not be to take away a taxpayer’s normal safeguards and rights of appeal and to give HMRC almost unprecedented executive powers….”, the measures in the 2014 Finance Bill are virtually unchanged from the HMRC Consultation Document published in January.
Although the legislation states that, once an Accelerated Payment Notice has been issued, the taxpayer has ninety days to pay the tax demanded, there has been an acknowledgement that, in many cases, the taxpayer would not have the funds to pay. In such circumstances, the taxpayer can contact HMRC in the ninety day period to agree arrangements for payment.
In terms of the legislative process, the 2014 Finance Bill is being considered by the Public Bill Committee of the House of Commons who are due to report by 17th June. The timetable remains for the Bill to receive Royal Assent and become law by mid-July.
Although there have been powerful submissions against these proposals, there is little doubt that they will be passed into law.
As a result, we have been in discussions with HMRC on this and can summarise the latest position:
– There is an acknowledgement by HMRC that there are inaccuracies in the Tax Assessments calculations that have been issued and there is an opportunity to correct these.
– There has been an acceptance by HMRC that individuals entered into Employee Benefit Trust and Contractor Loan schemes “with the perhaps mistaken belief that it was correct.” As a result, the HMRC will not being seeking to charge a penalty but will be looking to recover unpaid tax and interest,
– There is the opportunity to reach a full and final settlement with HMRC on this basis before the 2014 Finance Bill becomes law.
– The agreement of an extended period of time to pay the HMRC will be based on individual circumstances and whether the individual has used the ‘Time To Pay’ scheme before.
– A new phrase – Contractor Loan Schemes – has started to be used in the correspondence from HMRC.
– The HMRC are actively using the First Tier Tribunal ruling in the Boyle Case (which was a soft currency loan scheme) to support their assertion that Employee Benefit Trust loans were “not a loan but remuneration for work done or services provided in the UK…”
– The First Tier Tribunal in the Boyle determined that the loans were taxable income but could potentially be taxed as employment income or under the transfer of asset rules.
– As neither party has appealed the First Tier Tribunal ruling in the Boyle Case, the HMRC considers that this decision is final.
These last two points need careful consideration. The HMRC are clearly intending to argue that the Boyle case is “substantially similar” to Contractor Loan schemes.
Once the Finance Bill becomes law in July, as the HMRC has a Final Ruling in the Boyle case, they may well issue Follower and Accelerated Payment Notices on this basis.
Furthermore, the vagueness as to whether the loans ought to be taxed as employment income or under the transfer of asset rules carries an implicit risk. If the HMRC opt to pursue this as employment income (which is not currently their position), then the amounts would not only be subject to Income Tax but also National Insurance.
However, there is a strong body of expert opinion that believes the HMRC will be open to legal challenges on their decisions.
At CooperFaure, we have extensive knowledge of this sector. If you would like to discuss your circumstances or have any questions, please contact welcome@cooperfaure.co.uk to arrange an initial free consultation.
The old-style £50 note which features a portrait of Sir John Houblon, the first governor of the Bank of England, is to be withdrawn from circulation on Wednesday 30th April.
As a result, from 1st May, shops are unlikely to accept this note as payment. The new-style notes featuring portraits of Matthew Boulton and James Watt that were introduced in 2011 will still be legal tender.
The only problem is that the Bank of England estimates that there are still 53 million of the old-style notes in circulation which equates to £2.65bn. This large number is explained by the surge in demand for £50 notes during the financial crisis at the turn of the decade.
For the next few months, most banks will accept these notes for deposit into customer accounts. However, agreeing to exchange notes is at the discretion of individual institutions. Only Barclays, RBS, NatWest, Ulster Bank and the Post Office have agreed to exchange the old-style £50 notes, for up to £200 in value, at their branch counters for both customers and non-customers until 30th October 2014.
To comply with anti-money laundering regulations, you may be required to provide identification, such as a passport or driving licence, when exchanging your notes.
Ultimately, the Bank of England will always exchange its old-series notes at their premises on Threadneedle Street in the City of London.
If you are not sure which style of £50 notes that you have, please visit http://www.bankofengland.co.uk/banknotes/Documents/houblon50a4poster_gb.pdf to see a specimen.
From Saturday 26th April, the full implementation of new rules designed by the Financial Conduct Authority come into effect across the UK mortgage lending sector. These rules, the Mortgage Market Review, aim to protect consumers from the reckless lending that led to the crash in 2008 by changing the criteria on which a lending decision is made.
Traditionally, a mortgage lender would determine the amount that an applicant could borrow by applying a multiplier to their income. Under these new rules, the emphasis has shifted to the ability to afford the repayments.
The mortgage lender will interview all applicants to carry out an Affordability Check where their household income and expenditure will be reviewed in microscopic detail and where they are required to disclose any significant upcoming changes to their income.
One of the area of expense expected to come under particular scrutiny is child care costs. The government Tax-Free Child Care scheme does not come into effect until autumn 2015 and, until then, in many cases the parents carry the full cost.
Applicants are therefore faced with a vicious circle where this cost of allowing both parents to work to increase their household income will become an impediment to securing a mortgage.
Not only does the Affordability Check have to show that the repayments can be afforded today but also for the next five years. For example, lenders will apply a stress test to determine if the household budget can sustain the repayments if the level of interest rates were to increase by 3%.
These rules apply both to first-time buyers and those looking to remortgage and will have an impact both on the amount that can be borrowed and the length of time the application process will take.
To present the best picture to mortgage lenders, applicants are advised to have their household budget worked out in detail and to have reviewed their regular expenditure before starting the process. Paying off any debts, where possible, and the trimming the extras (such as unused gym memberships, a subscription to a streaming service or a wine club fee) will boost the profile.
It needs to be borne in mind that the mortgage lender will require at least three months of supporting documentation to show that they are financially healthy. As a result, any lifestyle changes need to be made well in advance of starting the application process.
Whilst those with a thrifty lifestyle and no dependants will potentially be able to secure a larger mortgage than they would have done previously, for the vast majority securing a mortgage just got tougher!
If you would like more detailed guidance on the impact of the Mortgage Market Review or have a specific question, please contact welcome@cooperfaure.co.uk to arrange a consultation.
Have you ever wondered why the tax year in the United Kingdom runs from 6th April to 5th April? The reason is steeped in history.
Prior to 1752, the New Year’s Day in Britain used to be in on 25th March, the Spring Quarter day, and the tax year started on the same day.
Back in 1582, Pope Gregory XIII had reformed the calendar from the Julian predecessor to the new Gregorian calendar. To improve accuracy, the length of a year was slightly reduced.
Britain was slow to adopt this change – by 1752 their calendar was eleven days out of sync from the rest of Europe.
To correct this, Wednesday 2nd September 1752 was followed by Thursday 14th September 1752, a change that literally led to riots on the streets due to the lack of compensation for the loss of income from the short working month.
The Treasury, mindful of this public fury, moved the start of the next tax year back by eleven days to 5th April 1753 so that the populous was not paying a full year of tax for only 354 days.
Although, as part of the change to the Gregorian calendar, New Year’s Day was moved to 1st January, the quarter days still are used in the determining when agricultural and commercial rents are payable.
The adjustment in the Gregorian calendar to slightly reduce the effective length of each year was to stop the century years from being a leap year, as they were under the Julian calendar. As a result, 1800 was a day shorter than it would have been. To reflect this, the Treasury moved the start of the tax year back by a day to 6th April 1800 and it has continued to be 6th April ever since!
Here are five Key Tax Changes have or will shortly come into force in the 2014-15 tax year:
– the standard Personal Allowance has increased to £10,000.
– the new ISA annual allowances are £5,940 each for a Cash ISA and a Share ISA.
– from 1st July 2014, all ISAs will be converted to New ISAs (NISAs) with an overall unrestricted annual allowance of £15,000.
– the Capital Gains Tax Private Residence Relief period will reduce from three years to eighteen months with effect from April 2014.
– almost every business is eligible for the Employment Allowance that reduces Employer’s National Insurance contributions by up to £2,000 per year.
As the UK passes the fifth anniversary of the interest base rate being at a historic low of 0.5%, this leaves businesses and individuals who have cash earning little return from holding these funds on deposit in a conventional bank or building society account.
For investors looking for a higher rate of return, there are a number of options – share portfolios, property, crowd funding and peer-to-peer lending a just a few.
One growing sector is investment in Fine Wine. Whilst this seems exotic and glamorous, it is crucial to understand how the system works and the risks that are involved.
In Bordeaux, with the notable exception of Chateau Latour, the ‘en primeur’ or wine futures market operates. This allows the chateaux to offer for sale some of their wine that is still in the barrel. For instance, the en primeur market for 2012 is still open but the wine will not be available for shipping until autumn this year or spring 2015. Similarly, this month the market for the 2013 vintage will open.
Important considerations are that a chateau set their price based on barrel samples that are only six to eight months old and that, once the price is set, it does not change. The result is that the wine is available at price before the finished product is tasted by the extremely influential wine critics.
For the chateau, this provides much-needed cashflow. For the investor, there is the opportunity to secure wines from classified Bordeaux estates of very limited quantities and that would be difficult to obtain and, potentially, much more expensive after they are released.
Alongside Bordeaux, Burgundy, the Rhône Valley and Port also operate an en primeur system.
There are, however, two important considerations. Firstly, wine has to be seen as a delicate investment with the potential for either a loss or a considerable profit and, to this end, no investment should be made without thorough research.
Secondly, the investor is not able to purchase directly from the chateau and, as a result, has to operate through a broker. As the product does not exist at the time of purchase, this does create the opportunity for fraud especially on the internet with a number of bogus brokerages having been exposed in recent years.
At CooperFaure, we have extensive knowledge of this sector and if you would like more detailed guidance on investment in Fine Wine, please contact admin@cooperfaure.co.uk to arrange a consultation.
Further to our live Twitter feed of the main announcements in the 2014 Budget. This newsletter looks in more depth at some of the key policy decisions that will impact individuals and businesses.
As previously announced, the Personal Allowance for the 2014-15 tax year will increase to £10,000. In the Budget, the Chancellor of the Exchequer set the Basic Rate Tax Threshold for the year at £31,865. Further, he announced that these limits for the 2015-16 tax year will be £10,500 and £31,785 respectively.
As a result, this means that the overall earnings amount before entering the Higher Rate Tax band is set to increase for the first time in this parliament.
The impact of this for an Owner/Director who is entitled to the full Personal Allowance, is paid an annual salary of £15,000 and has no other income, is to increase the amount available for the payment of Dividends without incurring personal tax from £23,805 in the current tax year to £24,178.50 in 2014-15 and £24,556.50 in 2015-16.
The Transferable Tax Allowance for married couples and civil partners will increase to £1,050 in the 2015-16 tax year where neither partner is a Higher or Additional Rate tax payer. This transferable amount will be set at 10% of the Personal Allowance in each tax year thereafter.
The change announced in the 2013 Budget to Employer provided Benefits in Kind relating to beneficial loans will come into force from April 2014. From then, the threshold for the small loans exemption limit will be increased from £5,000 to £10,000.
To encourage businesses to develop, the Annual Investment Allowance is set to increase to £500,000 for all qualifying investment in plant and machinery made on or after 1st April 2014 with this increased allowance running until 31st December 2015. This enables companies to claim the full cost of the expenditure against profits in the financial year of purchase.
In another step to encourage investment, the Seed Enterprise Investment Scheme (SEIS) is set to become permanent along with associated Capital Gains Tax reinvestment relief.
There have been modest steps in the Budget towards simplifying the tax system. The most tangible being that from April 2016, Class 2 National Insurance contributions for the self-employed will be collected through the Self-Assessment tax return rather than the current monthly or quarterly periodic payments.
In addition, the government has undertaken to consult of simplifying the rules on Employee Benefits and Expenses and the Construction Industry Scheme (CIS).
Whilst the pre-Budget rumours suggested that there may be a surprise in the realm of personal taxation, as it transpired it was the areas of Savings and Pensions that had the major reforms.
We will be issuing a Newsletter next week specifically on the Pension reforms and the impact of the proposed increased flexibility.
On Savings, the Individual Savings Accounts (ISA) has been dramatically simplified. Whereas up until now, there have been separate annual limits on the amounts to save in Cash ISAs and Share ISAs, from 1st July 2014 these will be merged into a single overall limit. Moreover, this limit will be increased to £15,000.
At the same time, the annual subscription limit for Child Trust Funds and Junior ISAs will be increased to £4,000.
The list of qualifying investments for ISAs will be extended to include peer-to-peer loans. In addition, the government will investigate further extending the list to include debt securities offered by crowdfunding platforms.
If you would like more detailed guidance on the impact of any of the Budget announcements, whether or not featured in this newsletter, or have a specific question, please contact admin@cooperfaure.co.uk to arrange a consultation.