St. James's Place Tax Guide 2013-2014

E. Lipkin, W. Sinclair, E. Lipkin, W. Sinclair, E. Lipkin, W. Sinclair

• Publisher: Palgrave Macmillan
• Year: 2013
• ISBN:
  9781137315298
• Edition: 42
• Topic: Business
• Subtopic: Small Business
• Index: Business

The 42nd annual edition of the leading guide to taxation in Britain. This practical and user-friendly guide is a bestseller with students, professionals, accountants and private individuals, explaining in simple terms how the UK tax system works and how best to minimise tax liabilities.

Chapter 1

THIS YEAR’S TAX CHANGES

1.1 Introduction

This chapter summarises many of the changes to the tax rules and rates which take effect for 2013–14. Also included are some important changes announced for future years. Tax planning pointers have been included in italics and these are amplified in Chapter 26. At the end of this chapter you will find a table of key rates and allowances for 2013–14.

You should remember that not all the changes included in the 2013 Budget take effect for 2013–14, which gives a planning interval in some cases.

1.2 Income tax

The rate bands have changed.

1.2.1 Income tax rates (5.0)

The basic rate ceiling for 2013–14 becomes £32,010.

The basic rate is 20 per cent from 2008–09.

The 10 per cent starting rate for savings income applies to any that you have within your top slice of income but below £2,790 for 2013–14.

A 45 per cent additional rate applies to taxable income over £150,000 for 2013–14.

The additional rate (45 per cent) provides valuable scope for wealthy couples to save tax by equalising their income (26.2.11).

After 6 January 2013, child benefit starts to be taxable if your net income or that of your partner exceeds £50,000 (5.2.2).

From 6 April 2013, a cap operates on unlimited tax reliefs. This applies at £50,000 or 25 per cent of the income if greater, if more than £50,000 is claimed. Relief for donations to charities remains unlimited (5.3.1).

1.2.2 Allowances and reliefs

Allowances such as personal allowance and age allowance have been increased (3.3).

For 2011–12, the personal relief for those under 65 went up to £7,475 and then £8,105 for 2012–13.

For those born after 5 April 1948, the personal relief is £9,440 for 2013–14 and will be £10,000 for 2014–15.

From 2011–12, the basic rate limit has been reduced so that higher rate payers do not benefit from the increase in personal relief.

From 2013–14, age allowance (3.2.7) is drastically reduced.

The pensions relief annual allowance remains at £50,000 and the lifetime allowance is £1.5m (14.3.1 & 14.6.2). These are reduced for 2014–15 to £40,000 and £1.25m.

Elements of child tax credit (3.4.4) and Working Tax Credit (WTC) increase for 2012–13 (3.4.4).

1.3 Tax on employments

The company car benefits tax scheme becomes progressively harsher for future years.

From 2016–17, petrol and diesel fuelled cars will become similarly taxed.

The car and van fuel benefit charges will be respectively increased.

1.4 Business taxation

From 6 April 2012 (1 April 2012 for companies) writing down allowance is 18 per cent for your main pool of plant and machinery.

The special rate on the pool of assets including long life ones is 8 per cent from April 2012.

From 6 April 2012 (1 April for companies) writing down allowance for cars is 8 per cent but only where the carbon dioxide emissions exceed 160 grams per kilometre (11.9.12); otherwise 18 per cent applies. Similar rules apply for car lease payments.

From April 2013, annual investment allowance at 100 per cent is only available on the first £250,000 plant etc., instead of £25,000.

From 1 April 2013, companies can elect to put a proportion of their patents etc. (starting at 60 per cent) into a Patent Box to be taxed at 10 per cent.

A ...

Table of contents

• Cover
• Title
• Copyright
• Contents
• Preface by Sir Mark Weinberg
• Abbreviations used in the Guide
• Introduction
• 1 This year’s tax changes
• 2 The basis of your tax liability
• 3 Personal reliefs
• 4 Annual interest and other payments
• 5 Computing your income tax bill
• 6 Husband, wife, civil partners and children
• 7 Income from land and property
• 8 Income from dividends and interest
• 9 Life assurance
• 10 Income from employments and PAYE
• 11 Income from businesses and professions
• 12 Partnerships
• 13 Companies
• 14 Pensions
• 15 Miscellaneous aspects
• 16 Returns, assessments and repayment claims
• 17 Domicile and residence
• 18 Tax on foreign income
• 19 Non-residents, visitors and immigrants
• 20 Capital gains tax
• 21 The taxation of trusts and estates
• 22 Inheritance tax
• 23 An outline of VAT
• 24 Stamp duty
• 25 Social security
• 26 Tax-saving hints
• 27 Tax tables
• Glossary
• Index