St. James's Place Tax Guide 2014-2015

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

• Publisher: Palgrave Macmillan
• Year: 2014
• ISBN:
  9781137411945
• Edition: 43
• Topic: Business
• Subtopic: Small Business
• Index: Business

The 43rd 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 2014–15. 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 2014–15.

You should remember that not all the changes included in the 2014 Budget take effect for 2014–15, 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 2014–15 becomes £31,865.

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 £2,880 for 2014–15.

From 6 April 2015, the savings rate will be 0 per cent on the first £5,000 of savings income.

A 45 per cent additional rate applies to taxable income over £150,000 for 2014–15.

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 2013–14, the personal relief for those under 65 goes up to £10,000 and then £10,500 for 2015–16.

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.

From 2015–16, part of your personal relief can be transferred to your spouse or civil partner provided neither of you pays more than the basic rate. The initial amount is £1,050.

The pensions relief annual allowance and the lifetime allowance are reduced for 2014–15 to £40,000 and £1.25m (14.3.1 and 14.6.2).

Elements of child tax credit (3.4.4) and Working Tax Credit (WTC) increase for 2014–15 (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 2014, annual investment allowance at 100 per cent is available on the first £500,000 plant etc., instead of £250,000.

From 1 April 2013, companies can ele...

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