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Rates and Allowances

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INCOME TAX RATES
                           
2014/15 2013/14
Band £ Rate % Band £ Rate %
0 - 2,880 10* 0 - 2,790 10*
0 - 31,865 20** 0 - 32,010 20**
31,866 - 150,000 40*** 32,011 - 150,000 40***
Over 150,000 45**** Over 150,000 45****

* Only applicable to dividends and savings income. The 10% rate is not available if taxable non-savings income exceeds £2,880 (£2,790).

** Except dividends (10%).

*** Except dividends (32.5%).
**** Except dividends (37.5%).

Other income taxed first, then savings income and finally dividends.

 
 

INCOME TAX RELIEFS

       

2014/15 2013/14
£ £
Personal allowance - under 65 10,000 9,440

- 65 - 74* 10,500 10,500
- 75 and over* 10,660 10,660
(Reduce personal allowance by £1 for every £2 of adjusted net income over £100,000.)
Married couple’s allowance (relief at 10%)* 7,915 7,705
(Either partner 75 or over and born before 6 April 1935.)

- min. amount 3,140 3,040
*Age allowance income limit 27,000 26,100
(Reduce age allowance by £1 for every £2 of adjusted net income over £27,000 (£26,100).)
Blind person’s allowance 2,230 2,160
 
 

PENSION PREMIUMS

   

2014/15

  • Tax relief available for personal contributions: higher of £3,600 (gross) or 100% of relevant earnings.
  •  
  • Any contributions in excess of £40,000 (previously £50,000), whether personal or by the employer, may be subject to income tax on the individual.
  •  
  • Where the £40,000 limit is not fully used it may be possible to carry the unused amount forward for three years.
  • Employers will obtain tax relief on contributions that are paid and made ‘wholly and exclusively’. Tax relief for large contributions may be spread over several years.
 
 

INDIVIDUAL SAVINGS ACCOUNTS (ISAs)

                 

2014/15 2013/14
£ £
Overall annual investment limit 11,880 15,000
Comprising - cash up to 5,940 max. 15,000 max.

- balance in stocks and shares 11,880 max. 15,000 max.
 
 

CAR, VAN AND FUEL BENEFITS

                                                                                 
2014/15
CO2 emissions(gm/km)(round down to nearest 5gm/kg) % of car's list price taxed

Company Cars

· For diesel cars add a 3% supplement but maximum still 35%.
· A 0% rate applies to cars which cannot emit CO2 when driven.

up to 94 11 · A 5% rate applies to non-electric cars with emissions which do not exceed 75gm/km.
95 12
100 13
105 14
110 15
115 16
120 17
125 18 · A 10% rate applies to non-electric cars with emissions which do not exceed 120gm/km.
130 19
135 20
140 21
145 22 · For cars registered before 1 January 1998 the charge is based on engine size.
150 23
155 24 · The list price includes accessories and is not subject to an upper limit.
160 25
165 26 · The list price is reduced for capital contributions made by the employee up to £5,000.
170 27
175 28 Car fuel benefit 2014/15
180 29 £21,700 x ‘appropriate percentage’*
185 30 *Percentage used to calculate the taxable benefit of the car for
190 31 which the fuel is provided.
195 32 The charge does not apply to certain environmentally
200 33 friendly cars.
205 34 The charge is proportionately reduced if provision of private
210 35 fuel ceases part way through the year. The fuel benefit is
210 and above 35 reduced to nil only if the employee pays for all private fuel.


Van benefit per vehicle 2014/15

Van Benefit £3,090 Fuel Benefit £581
The charges do not apply to vans which cannot emit CO2
when driven or if a ‘restricted private use condition’ is met
throughout the year.
 
 

MILEAGE ALLOWANCE PAYMENTS

           

2014/15
Rate per mile
Cars and vans
Up to 10,000 miles 45p
Over 10,000 miles 25p

Bicycles 20p

Motorcycles 24p

These rates represent the maximum tax free mileage allowances for employees using their own vehicles for business. Any excess is taxable. If the employee receives less than the statutory rate, tax relief can be claimed on the difference.

 
 

CAPITAL GAINS TAX

                                                 

2014/15 2013/14
Individuals

£

£

Exemption 11,000 10,900
Standard rate 18% 18%
Higher rate* 28% 28%
Trusts
Exemption 5,500 5,450
Rate 28% 28%

*For higher and additional rate taxpayers.

Entrepreneurs’ Relief
        The first £10m of qualifying gains are charged at 10%. Gains in excess of the limit are charged at the rates details above.

 
 

CORPORATION TAX

                                                                 



Year to 31.3.15 Year to 31.3.14
Profits Band Rate Profits Band Rate
£ % £ %
Small profits rate 0 - 300,000 20* 0 - 300,000 20*
Marginal (small 300,001 - 1,500,000 21.25* 300,001 - 1,500,000 23.75*
profits rate)
Main rate Over 1,500,000 21* Over 1,500,000 23*
Standard fraction 1/400*
3/400*

The profits limits are reduced for accounting periods of less than 12 months and for a company with associated companies.

       

*Different rates apply for ring-fenced (broadly oil industry) profit.

 
 

STAMP DUTY

                       
Land and buildings (on full consideration paid)
Rate Residential property Non-residential
£ £
Nil 0 - 125,000 0 - 150,000
1% 125,001 - 250,000 150,001 - 250,000
3% 250,001 - 500,000 250,001 - 500,000
4% 500,001 - 1,000,000 Over 500,000
5% 1,000,001 - 2,000,000 -
7% Over 2,000,000 -


Shares and securities - rate 0.5%.

 
 

INHERITANCE TAX

 
Death
rate
Life
rate
Chargeable transfers
2013/14 and 2012/13
% %
Nil Nil £0 - 325,000*
40 20 Over £325,000*

*Potentially increased for surviving spouses or civil partners who die on or after 9 October 2007.

Reliefs
Annual exemption £3,000
 
Marriage - parent £5,000
Small gifts £250
- grandparent £2,500

- bride/groom £2,500
- other £1,000
Reduced charge on gifts within seven years of death
Years before death 0-3 3-4 4-5 5-6 6-7
% of death charge 100 80 60 40 20
 
 

NATIONAL INSURANCE

           
2014/15 Class 1 (employed) contracted in rates
Employee Employer
Earnings per week % Earnings per week %
Up to £149 Nil* Up to £148 Nil
£149.01 - £797 12 Over £148 13.8
Over £797 2

* Entitlement to contribution-based benefits retained for earnings between £109 and £149 per week.

                                                           
Class 1A (employers) 13.8% on employee taxable benefits
Class 1B (employers) 13.8% on PAYE Settlement Agreements
Class 2 (self-employed) flat rate per week £2.75
small earnings exception £5,885 p.a.
Class 3 (voluntary) flat rate per week £13.90
Class 4 (self-employed) 9% on profits between £7,956 and £41,865
plus 2% on profits over £41,865
 
 

MAIN SOCIAL SECURITY BENEFITS

                                                                                                                                                                                                                 
Weekly benefit
2014/15 2013/14
Basic retirement pension - single person £113.10 £110.15

- married couple £180.90 £176.15
Statutory pay rates - average weekly earnings £111 (£109) or over
Statutory Sick Pay
£87.55 £86.70
Statutory Maternity Pay
First six weeks
90% of weekly earnings
Next 33 weeks
£138.18* £136.78*
Statutory Paternity Pay - two weeks £138.18* £136.78*
Statutory Adoption Pay - 39 weeks £138.18* £136.78*
*Or 90% of weekly earnings if lower.
Additional Paternity Pay and Leave may be available for a child due or
adoptions matched on or after 3 April 2011.
 
 

VALUE ADDED TAX

                             
Standard Rate 20%
Reduced Rate 5%
Annual Registration Limit from 1.4.13
(1.4.12 - 31.3.13 £77,000)
£81,000
Annual Deregistration Limit from 1.4.13
(1.4.12 - 31.3.13 £75,000)
£79,000
 
 

CAPITAL ALLOWANCES

Plant and machinery - Annual Investment Allowance (AIA)

The AIA gives a 100% write-off on most types of plant and machinery costs, including integral features and long life assets but not cars, of up to £250,000 p.a. for expenditure incurred on or after 1 January 2013 (£500,000 for expenditure incurred on or after 6 April 2014 (1 April 2014 for companies). Special rules apply for accounting periods straddling these dates.) Any costs over the AIA fall into the normal capital allowance pools at either 10% or 20%. The AIA may need to be shared between certain businesses under common ownership.

Other plant and machinery allowances

The annual rate of allowance is 18%. A 8% rate applies to expenditure incurred on integral features and on long life assets. A 100% first year allowance may be available on certain energy efficient plant and cars, including expenditure incurred on new and unused zero emission goods vehicles.

Cars

 For expenditure incurred on cars on or after 6 April 2013 (1 April 2013 for companies), costs are generally allocated to one of the two plant and machinery pools. Cars with CO2 emissions not exceeding 130gm/km (previously 160gm/km) receive a 18% allowance p.a. Cars with CO2 emissions over 130gm/km (160gm/km) receive a 8% allowance p.a.  

 

SELF ASSESSMENT: KEY DATES 2014/15

                                                                                                                                                                                       
31 July 2014 - Second payment on account for 2013/14
5 October 2014 - Deadline for notifying HMRC of new sources of income if no tax return has been issued for 2013/14
31 October 2014 - Deadline for submission of 2013/14 non-electronic returns
31 January 2015 - Deadline for filing electronic tax returns for 2013/14
- Balancing payment due for 2013/14. First payment on account due for 2014/15.

Why Choose Nixon Williams?

At Nixon Williams our aim is to assist in making your contracting life easier by removing the stress normally associated with accounting, taxation and other financial issues experienced by contractors.

Each of our clients are provided with a single point of contact that will be on hand to assist with any accountancy or tax related queries.

We invest a large amount in people; indeed 98% of our accounting staff having either completed or are studying towards one of the following qualifications: ACMA, ACCA, CTA, ATT or AAT.

If you have any questions about contracting or would like any further advice please call our new business team on 01253 362062, email: newbusiness@nixonwilliams.com or join us today by completing our online application form.