1. Personal Allowances Increase
The Personal Allowance will increase from £10,600 in 2015/16 to £11,000 in 2016/17 and £11,200 in 2017/18.
The 40% high rate threshold will increase from £42,385 in 2015/16 to £43,000 in 2016/17 and £43,600 in 2017/18. The National Insurance upper earnings limit will increase in line with the higher rate threshold.
2. Zero Tax Rate on Savings 2015/16
As reported a year ago, there will be a zero rate on the first £5,000 of investment funds salary from 2015/16 onwards. Nevertheless, note that this will just give full advantages to those with assessable salary between the fundamental rate band £10,600 and £15,600.
3. £1,000 Interest Income Tax Free 2016/17
Starting April 2016, a tax-free allowance of £1,000 (or £500 for higher rate taxpayers) will be brought in for the interest that people acquire on savings. If you are a higher rate taxpayer and earn between £42,701 and £150,000, you'll be eligible for a £500 tax-free savings allowance, but those with income in excess of £150,000 a year, will be taxed in full on their interest income. On the other hand, if you are a basic rate taxpayer and have a whole income up to £42,700 a year, you will be eligible for the £1,000 tax-free savings allowance.
4. Buy to Let Landlords
The relief on interest costs will be restricted to the basic rate of tax (20%), and will be phased in over the 4 years starting from April 2017.
From April 2016, the "Wear and Tear" allowance will be replaced with a new relief that will allow the Landlords to deduct the cost of replacing any furnishings.
5. Rent a Room
The Allowance for rent a room schemes will increase from £4,250 to £7,500 in April 2016.
6. Inheritance Tax
Major changes will occur that should bring personal residences worth under £1 million out of IHT. For more information, please phone us on 020 8941 2187 for a discussion.
7. Employment Allowance
This allowance which is currently £2,000 per company is being increased to £3,000 per company from April 2016.
8. National Living Wage
From April 2016, the NLW will be set at £7.20 per hour for employees over 25; rising to £9.00 per hour by 2020. (Both this and the Auto Enrolment Costs need to be costed into businesses from April 2016)
9. Corporation Tax
The rate of Corporation Tax will be reduced from 20% to 19% in 2017 and 18% in 2020.
10. Annual Investment Allowance
The permanent level of AIA will increase to £200,000 for all qualifying investments in Plant and Machinery made on or after 1st January 2016.
Corporation Tax relief will now be restricted for the cost of goodwill acquisitions on or after 8th July 2015.
12. Care Homes
The Government has delayed, until April 2020, the implementation of the £72,000 limit on "Cap on Care Costs" contributions towards Care Homes costs.
With the economy now coming out of recession, clients should remember that more businesses go bust coming out of recession than going into or during recession.
Goddards have linked up with Finance Houses in order to assist clients in raising funds for Invoice Discounting, Plant & Machinery acquisition and Stock Funding.
In addition we can prepare Business Plans, Budgets and Cash Flows for third party investments into a business. Why not phone us on 020 8941 2187 to discuss your needs/requirements.