2013/14 Personal Tax Tips

Need help with personal tax in Bexhill, Hastings and Vauxhall? Look no further!
Here are some recent personal tax changes that you may be interested in.

CHILD BENEFIT
From January 2013, when an individual is earning more than £50,000, their entitlement to Child Benefit is reduced by 1% for every £100 over this limit. At £60,000 and above, it is completely withdrawn. However, it is not always the best action to stop the benefit, as the non-working partner could lose many years of state pension contributions as a result. Do NOT just stop it! Speak to a tax advisor first!

PERSONAL ALLOWANCE
The personal allowance was increased in the budget this year to £9,440. This is the amount you can earn before you have to pay income tax and applies whether you are employed or self employed. The increase means that each basic rate taxpayer will pay £267 less tax each year. If you are employed, it is advisable to check your tax code on your payslip to ensure you are receiving this increased allowance. Your tax code should be 944L (unless there are any other deductions or additional allowances you know of).
If you are a higher rate tax payer, it is important to note that married couples/civil partners can utilise both allowances by transferring income-producing assets to your spouse to benefit from their lower taxable income.

ISA ALLOWANCE
Every year, everyone in the UK receives an ISA allowance. For this year, the allowance is £11,520 (£5,760 in cash). To reap the greatest rewards from this, you should take advantage of it as soon as possible in the tax year to earn tax free interest on your savings.

LATE TAX RETURN PENALTIES
HMRC are now issuing automatic penalties for late self-assessment returns. The deadline is 31st January for online returns. The penalty is £100 plus further daily penalties. This can amount to a significant penalty of at least £1300 for a return that is 6 months late!

CAPITAL GAINS TAX
The annual tax-free allowance allows you to make a certain amount of gains each year before you have to pay tax. For individuals, personal representatives and trustees for disabled people, this amount is £10,900 for 2013/14. See our October issue for more on Capital Gains Tax.

DON’T GET STRESSED, GET ADVICE FROM AN ACCOUNTANT/TAX ADVISOR! – This is the most effective way of finding the best solution for you.

DISCLAIMER This feature aims to give some informal hints and tips. McPhersons Chartered Accountants will not be held responsible for any inaccuracies. For detailed advice, please contact McPhersons to arrange a consultation.

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