Following the Autumn Statement and subsequent releases changes for the tax year 2014/15 have been outlined as below
National Insurance Contributions
Self-employed class 2 will be £2.75 per week
Self-employed class 4 will be payable between £7956 and £41865 at 9%, above £41865 the additional rate is payable at 2%
Employee’s class 1 is due between £153 to £805 per week at 12%, above £805 per week the additional rate is payable at 2%
Employer’s class 1 is due above £153 per week at 13.8%
Note: From April 2014 the first £2000 of employers NI is exempt from payment.
It has also been proposed that from April 15 employers will not have to pay the employer’s class 1 NICs on the wages of employees aged under 21 where the employee earns less than £813 per week.
Sick Pay Support
Currently employers can recover statutory sick pay (SSP) paid to employees where the total paid exceeds 13% of total class 1 NICs of the same month. This is to be abolished from 6 April 2014 therefore making SSP an unrecoverable cost for all employers.
Income Tax Allowances
The standard personal allowance will increase to £10,000
The personal allowance for those aged 65-74 will remain at £10,500
The personal allowance for those 75 and over will remain at £10,660
Note: The age related allowance will reduce to the standard allowance if total income exceeds £27,000.
The income tax bands will be as follows
Basic rate (20%) up to £31,865 (over personal allowance ie £41,865 in total)
Higher rate (40%) from £31,866 to £150,000
Additional rate (45%) over £150,000
Note: The personal allowance will again reduce where income exceeds £100,000
Married Couples Allowance
From April 2015 married couples and civil partners will be able to transfer up to £1000 of their personal allowance to their spouse but this can only be applied if both members of the couple are basic rate taxpayers or pay no tax in the year.
Capital Gains Tax
Where you sell a property that has at some point in time been your main home any gain on the period occupied is free from tax as is the the last 36 months of ownership. From 5 April 2014 any disposals made will only receive a final tax free period of 18 months.
Once the budget has been announced on the 19 March 2014 our normal update will be made with any revisions.