Income Tax Allowances
- The personal allowance quoted is for people born after 5 April 1938. The allowance is subject to an income limit of £100,000 and is reduced by £1 for every £2 above the limit.
- The marriage allowance is available to married couples and civil partners born on or after 6 April 1935. A spouse or civil partner who is not liable to income tax can transfer up to this amount of their personal allowance to their spouse or civil partner. The recipient must not be liable to income tax at the higher or additional rate.
Tax Bands and Rates
|Basic rate – 20%||£0 – £31,785||£0 – £31,900||£0 – £32,300|
|Higher rate – 40%||£31,786 – £150,000||£31,901 – £150,000||£32,301 – £150,000|
|Additional rate – 45%||Over £150,000||Over £150,000||Over £150,000|
- From 1 April 2015, corporation tax is paid at a single rate of 20%.
|Rate (for estates)||40%|
|Reduced rate (for estates leaving 10% or more to charity)||36%|
|Rate (for chargeable lifetime transfers)||20%|
|Nil rate band limit||£325,000|
Pension Savings Tax Relief
VAT registration and deregistration thresholds
|From April 2015|
|VAT registration threshold||£82,000|
|VAT deregistration threshold||£80,000|
- A new Personal Savings Allowance will be introduced from 6 April 2016 to remove tax on up to £1000 of savings income for basic rate taxpayers and up to £500 for higher rate taxpayers. Additional rate taxpayers will not receive the allowance.
- Individuals will be able to withdraw and replace money from their cash ISAs in-year, without it counting towards their annual ISA subscription limit, as long as the repayment is made in the same tax year as the withdrawal. The limit will rise to £15,240 in 2015/16.
- New Help to Buy ISAs are going to be made available through banks and building societies from this Autumn. First time buyers will be able to save up to £200 a month towards purchasing a property in the UK. The Government will pay a bonus of £50 for every £200 saved, up to a maximum of £3,000. Accounts are limited to one per person rather than one per home, so those buying together can both receive a bonus. The bonus will be available on home purchases of up to £450,000 in London and up to £250,000 outside London.
Tax Avoidance and Evasion
- The Liechtenstein Disclosure Facility is going to close early at the end of 2015, rather than 5 April 2016.
- The current British Crown disclosure facilities covering Guernsey, the Isle of Man and Jersey are also going to be closed early in December 2015, rather than the end of September 2016.
- A new, harsher ‘last chance’ disclosure facility is going to run from 2016 until mid-2017, after the existing disclosure facilities close. This new facility will charge penalties of at least 30% and will offer no guarantee of immunity from criminal investigation. It is being launched to coincide with new information exchange agreements which are due to come into force, whereby offshore account data will be automatically shared among 92 countries. HMRC will receive a wide range of information on accounts held by UK residents including names, addresses, account numbers, interest and balances. £4m is being invested by the government in data analytics to maximise yield from the data sharing.
- An additional 21,000 Accelerated Payment Notices (APNs) are going to be issued by HMRC, over and above the original estimate. Towards the end of last year, HMRC stated it was going to issue 43,000 APNs by the end of March 2016, protecting £7.1bn in tax.
- Further action is also planned to introduce tougher measures for ‘serial avoiders’ who persistently enter into tax avoidance schemes that fail, including a special reporting requirement and a surcharge.
- Promoters of Tax Avoidance Schemes (POTAS) can also expect closer scrutiny. HMRC has already written to a number of promoters warning of the consequences if they do not change their behaviour and the first Conduct Notice has already been served on a promoter. If a promoter does not comply with the terms of a Conduct Notice, a stricter Monitoring Notice can be issued. This will result in the promoter being publicly named and potential exposure to a fine up to £1m if the Monitoring Notice is not complied with. Legislation which will enable HMRC to issue Conduct Notices to a wider range of connected persons is planned.
- The requirement for individuals and small businesses to file annual tax returns is set to go. By early 2016, five million small businesses and ten million individuals will have access to their own digital tax account. By the end of the next Parliament every individual and small business will have one.
- Taxpayers will get a real-time view of their tax affairs and will no longer have to give HMRC information it already holds about pensions, employment or savings income for example.
- Small businesses will be able to link their accounting software to their digital account and have the option to ‘pay as you go’ to help manage cash flow.
- A ‘roadmap’ is due to be published later this year to consult on the changes.
- From April 2016, rules restricting travel and subsistence relief for workers engaged through an employment intermediary, such as an umbrella company or a personal service company, will take effect. The government also wants employment intermediaries to provide workers with greater transparency on how they are employed and what they are being paid. The Department of Business Innovation and Skills will consult on these proposals later in the year.
Author: Guy Smith, Tax Investigations Manager on the ReSource Tax and VAT Consultancy Team.