Personal tax summary: £10k allowance on the way

 

The Chancellor announced an increase in the income personal allowance to £10,000 in 2014 - a year ahead of schedule, plus new childcare vouchers for working parents and a new employment allowance for companies.

The Chancellor rolled off the changes confidently, which also include more information on the new CGT-exempt shares for employee shareholders and a decision to freeze inheritance tax nil-rate band until next year. 

Here are some of the key announcements and rates set on HMRC's individual tax page

  • Income tax personal allowances for 2014-15: The personal allowance for people born after 5 April 1948 will be increased to £10,000 in 2014-15. 
  • New childcare scheme from Autumn 2015: For childcare costs of up to £6,000 per year per child, support of 20% will be available worth up to £1,200. From the first year of operation, all children under 5 will be eligible and the scheme will build up over time to include children under 12.
  • Exemption threshold for employer provided beneficial loans: The threshold for employment-related taxable cheap loans to be treated as earnings of the employment, will increase from the current threshold of £5,000 to £10,000 for  2014-15.
  • IHT: In Finance Bill 2014, legislation will be introduced to extend the freeze on inheritance tax nil-rate band of £325,000 for a further three years from 2015-16 to 2017-18.
  • Collection of debts through PAYE employer codes: The government will consult later this year on collecting tax debt through the PAYE coding system.
  • Company car tax percentage bands: For new C02 emission percentage bands, see Company car tax rate changes
  • SEIS shares - reinvestment relief and income tax relief: CGT relief for reinvesting gains in SEIS shares to gains accruing in 2013-14 hen those gains are reinvested during 2013-14 or 2014-15 will apply to half the qualifying re-invested amount.

Further details on these rates will be available in AccountingWEB's 2013-14 tax tables

Alex John, TaxCalc product manager, provided the following comments:

 

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Comments
Old Greying Accountant's picture

Presumably ....

Old Greying Acc... | | Permalink

... the £10K PA will be countered by a reduction in the HR threshold so it will mean diddly squat for 40% rate tax payers. or those just under the HR threshold at present?

thacca's picture

no

thacca | | Permalink

The higher rate threshold increases as well in 2014.

Rachael_Power's picture

Lexis Nexis has just posted

Rachael_Power | | Permalink

Lexis Nexis has just posted quite a good summary of the personal allowance here - that should help.

Old Greying Accountant's picture

Blimey ...    1 thanks

Old Greying Acc... | | Permalink

thacca wrote:
The higher rate threshold increases as well in 2014.

... unheard of, I need to sit down I've come over all peculiar :o)

Savings rate band

Shirley Martin | | Permalink

Those people who currently benefit from the 10% savings rate band could, by my reckoning, be worse off by £167 - £279, depending upon how old they are.  This may not seem like a lot of money to those well remunerated people at the Office of Tax Simplification who came up with the idea, but it is a real blow if your income is more like £13k.

It makes me really angry.

Shirley

Marion Hayes's picture

Sorry but

Marion Hayes | | Permalink

althoiugh the total of allowance plus BR band goes up by 1% the actual HR threshold goes down to 31,865 from 32,010

Old Greying Accountant's picture

Thought it ...

Old Greying Acc... | | Permalink

... was too good to be true!

Steve-EBL's picture

Higher rate

Steve-EBL | | Permalink

Which in real terms is a good sized contraction.