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UK: Income tax

Tuesday, 25 March 2014   (0 Comments)
Posted by: Author: Chartered Accounts Ireland
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Author: Chartered Accounts Ireland

The personal allowance for 2015-16 is to increase to £10,500 from £10,000 with the basic rate limit set at £31,785 for that tax year. However the Chancellor also proposes to consult on how best to limit the availability of the personal allowance to those whose centre of vital interests is in the UK. 

Legislation will be introduced in Finance Bill 2014 to reduce the starting rate for savings income from 10% per cent to nil, and to increase the maximum amount of an individual’s savings income that can qualify for this starting rate from £2,880 in 2014-15 to £5,000 for 2015-16. Secondary legislation will also ensure that savers who are not liable to pay income tax on their savings income can register to receive interest payments from their bank or building society without tax being deducted.

As announced in Autumn Statement 2013, Finance Bill 2014 will contain legislation allowing a spouse or civil partner to apply to transfer £1,050 of their personal allowance to their spouse or civil partner. The spouse or civil partner will receive the transferable allowance as a reduction to their income tax liability at the basic rate of tax. To be eligible to make or receive the transfer, neither party must be liable to income tax at the higher or additional rate. From 2016-17, the transferable amount will be 10% of the personal allowance for those born after 5 April 1938.

From 6 April 2014, the individual limits under Share Incentive Plans will be increased to £3,600 on the ‘free’ shares companies can award to employees and to £1,800 on the ‘partnership’ shares employees can purchase.

Draft guidance will be published later this week on the Social Investment Tax Relief which will be available from 6 April 2014. This intends to introduce a range of income and capital gains tax reliefs as incentives for investment by individuals in qualifying social enterprises. Income tax relief will be available at 30% of the amount invested.

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Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.

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