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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