Wednesday 30 March 2016

The third Budget in 12 months



This Budget looked as if it would be a difficult one for the Chancellor, faced as he was with disappointing economic numbers and the need to avoid ruffling feathers ahead of June’s in/out referendum. What was to have been the big announcement – reform of pensions – was kicked into the long grass a few weeks ago. Nevertheless, Mr Osborne did spring a few surprises, including some tax reductions.

How will this Budget affect you? If you are – or want to be – a saver, then there is plenty to consider. From April 2017 a new ISA, the Lifetime ISA, will be launched for the under-40s. It looks as if it is a close relation of the recently abandoned pensions ISA. Also from 2017/18, the normal ISA contribution limit – unchanged for 2016/17 – will rise to £20,000.

Capital gains tax (CGT) rates will fall from 2016/17 to 20% and 10%, although the current rates of 28% and 18% will continue to apply to residential property (another buy-to-let attack) and carried interests. There will be a new entrepreneurs’ relief (effectively 10% CGT) for external long term investors in unlisted companies.

Other important changes for included:

·   Increases in the personal allowance for 2017/18 to £11,500 and the higher rate threshold to £45,000.
·   A restructuring of stamp duty land tax (SDLT) on commercial properties. 
·   A major revamp of business rates, permanently doubling the Small Business Rate Relief.

If you would like to discuss any of the issues raised in the Spring Budget please do not hesitate to contact the team at Ward Williams Financial Services Ltd on 01932 830664 or by email on wwfs@wardwilliams.co.uk.

Tuesday 22 March 2016

Changes to the taxation of saving income



There are significant changes to the income tax rules from 6 April 2016 which affect the taxation of savings income.

From 6 April 2016, if you are a basic taxpayer you may be able to receive up to £1,000 in savings income tax free. Higher rate taxpayers will be able to receive up to £500.

Savings income includes the following:

     interest from bank and building societies accounts

     interest from credit union or National Savings and Investment  accounts

     income from government or company bonds

     interest distributions from authorised unit trusts

     most types of purchased life annuity payments

As a result of this from 6 April 2016 interest will be paid gross rather than net which is the current position for most interest paid to individuals. Net payments are received after deduction of the basic rate of tax of 20%. Interest from ISAs is not included in your Savings Allowance (SA) because it is already tax free.

No action is required to claim the allowance. If the amount of savings income you receive is higher than the allowance, banks and building societies will provide details to HMRC and they will amend your tax code to collect any tax due. If you complete a Self Assessment tax return you should carry on doing this as normal.

Internet link: GOV.UK

For more information please do not hesitate to contact the team at Ward Williams Financial Services Ltd on 01932 830664 or by email on wwfs@wardwilliams.co.uk.

Wednesday 16 March 2016

Auto enrolment success for small businesses



More than 90% of the first small employers required to put their staff into a workplace pension have now complied with the law.

Around 12,000 small and micro employers became subject to the new legal requirements last summer and the vast majority have put their eligible staff into a pension. For the small numbers that did not comply, the Pensions Regulator (TPR) used their powers of enforcement action.

Although compliance with the rules remains the norm, TPR has noted that smaller employers are more likely to leave things to the last minute and they are therefore more likely to receive a compliance notice which could lead to a fine.

Since the start of auto enrolment:

    4,818 compliance notices have been issued

    around half of these (2,596) were issued between October and December last year

    a total of 1,594 £400 Fixed Penalty Notice fines have now been issued to employers

    just over a thousand (1,021) Fixed Penalty Notices were issued in the last quarter of 2015

Compliance notices act as a warning and give employers a deadline to meet their duties and avoid a fine.

Internet link: TPR press release

For more information please do not hesitate to contact the team at Ward Williams Financial Services Ltd on 01932 830664 or by email on wwfs@wardwilliams.co.uk.