Autumn Statement 2016 - A few personal tax issues
Some of the bullet points of interest include:
- An increase in the personal allowance to £11,500, and the higher rate threshold to £45,000 from April 2017
- A promise that the personal allowance is destined to rise to £12,500 and the higher rate threshold to £50,000 by the end of the current Parliament
- The withdrawal of the Class 2 National Insurance Contribution for the self-employed is confirmed from April 2018
- There are two new exemptions of £1,000. Self-employment or property income of less than £1,000 will escape tax altogether.
- Savings income of up to £5,000 will be at taxed at 0% rate from April 2017
- A new ‘Tax-Free Childcare’ (TFC) scheme will be launched from early 2017 and rolled out gradually
A reminder that, Childcare Vouchers are to be replaced by a new scheme from April 2018, called ‘Tax-Free Childcare’. The new scheme will be available for both employees and the self-employed. Interestingly employers will not be responsible for providing a registered scheme.
An online account will be available from the Government website from early 2017, and for every £8 that is paid in by a parent, the Government will contribute £2 (up to a maximum of £2,000 per child, per year, £4,000 for disabled children).
To qualify, both of the parents will need to be in work, and both need to receive earnings between £5,980 to £100,000 per year. If for example, one parent earns over £100,000, then the family will not be eligible for the scheme. It is important to note though that if an individual is already registered with a current Childcare Vouchers scheme, the benefits and contributions can continue.
If you should have any questions or wish to discuss any of the above, we are here to help you. Please contact Martin Coulson or your usual Mercer & Hole contact
Date: 25th November, 2016
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