All news by: Peter Richardson

Is the top rate of Income Tax 45%?

Named the additional rate, the highest rate of Income Tax is 45%, and some might say 45% is high enough.

However, if the rate of tax is measured as the relationship between income and tax plus tax related penalties paid, there are times when this 45% can rise, to as much as 90%.

Are you eligible to claim the Marriage Allowance?

Marriage Allowance lets you transfer £1,190 of your Personal Allowance to your husband, wife or civil partner - if they earn more than you.
This reduces their tax by up to £238 in the tax year. To benefit from this arrangement, you (as the lower earner) must have an income below your Personal Allowance - this is £11,850 for the current tax year.

Tax-free childcare support expanded

Since 14 February 2018, tax-free childcare has become available to all remaining eligible families: parents whose youngest child is under 12. The new scheme aims to help working parents with the cost of childcare. 

According to government, it is quick and easy to apply, and parents could save thousands of pounds each year. For every £8 parents pay into their childcare account, the government will add an extra £2, up to £2,000 per child per year. HMRC has been gradually rolling out tax-free childcare since April 2017. 

Have you submitted your tax return?

The countdown has begun for this years’ online tax return, a crucial time for around 11 million taxpayers who are self employed or  receive other income that requires the submission of a tax return, which is normally rental income, or interest and dividend income that is liable to income tax.  Because of changes made to the taxation of dividends with effect from 6 April 2017, any one who receives more than £5,000 of dividends in a year is likely to have an income tax liability, even if they are only basic rate taxpayers.  In the past only higher rate taxpayers have had to pay any tax on their dividend income.

Paying self-assessment tax by instalments

If you file your 2016-17 self-assessment tax return on or before 30 December 2017, you can elect to spread the repayment of any underpayment of tax for 2016-17 to the tax year 2018-19. This is done by amending your tax code for 2018-19 such that any arrears are repaid by increasing your tax payments each pay period.

VAT bad debt relief

If you use standard VAT accounting – pay VAT on sales when invoiced and claim back VAT on purchases when invoiced – you may have availed yourself of the six months claim for bad debt relief on unpaid invoices

Stamp duty increase penalises home buyers

There has been much press commentary regarding the extra 3% Stamp Duty Land Tax (SDLT) and the 3% Additional Dwelling Supplement (ADS) – part of the Land and Building Transaction Tax in Scotland – that applies to the purchase of a second residential property by individuals in the UK from 1 April 2016.

Retirement age NI bonus

When you reach the State Retirement Age (SRA) you stop paying Class 1 NIC contributions if you are employed, and Class 2 contributions if you are self-employed.

You will still have to pay Class 4 NIC, the most significant self-employed NIC charge, for the entire tax year during which you achieve the SRA. The next year you will be exempt.