Government to Reduce Charity Gift Aid Confusion
The model Gift Aid declaration form is set to undergo an expansive improvement in the coming months thanks to the Government’s commitment to stop charities, especially small charities who are more likely to use the form, from losing out on billions of pounds worth of Gift Aid.
The National Audit Office (NAO) estimates that Gift Aid wasn’t used in donations worth approx. £2.3 billion. Though the NAO recognise that not all of these donations would have been eligible for Gift Aid, it’s a fair assumption that a vast number of them would have been.
Speaking on the issue, Exchequer Secretary to the Treasury Priti Patel said:
Gift Aid is an important tax relief for charities which helps to provide essential revenue to charitable causes. This research shows that there is more that government can do to boost eligible donations which is why we are simplifying the declaration forms to make sure donors understand when they’re eligible so that charities can maximise the financial donations they receive.
The New ISA (NISA)
Just a few months ago we created a simplified guide to Individual Savings Accounts (ISAs) here at Tax Agility, a guide that sought to help you understand the differences between cash and investment ISAs in just a few short paragraphs.
During Chancellor George Osborne's Budget speech, he set forth his plan for cash and investment (share) ISAs to become interchangeable, with each existing adult ISA set to turn into a New ISA (NISA), arguably one of the biggest announcements of Mr Osborne’s fourth and final Budget before next year’s General Election.
Supporting Savers
In what the Chancellor called a bid to dramatically increase “the simplicity, flexibility and generosity of ISAs” for the 24 million UK adults who are currently in possession of one, the New ISA will allow savers to subscribe the full annual tax-free savings limit into a cash account (previously only 50% of this annual limit could be saved in cash, see below), as well as adding a wider range of securities that can be invested within a New ISA; such as certain retails bonds less than five years from maturity.
Designed primarily to support savers, especially those who were previously hitting their annual cash ISA limits on a yearly basis, HMRC predict the economic impact of the introduction of the New ISA to be as follows:
“These measures will reduce income tax on savings for people constrained by the current ISA limits, improving incentives to save and increasing real household disposable incomes. This might feed through to higher consumption or savings in the household sector. There may also be a shift in the savings portfolio composition towards cash deposits.”
NISA Tax-Free Limits
From 1 July 2014 the new, all-inclusive tax-free NISA limits will be increased to £15,000 a year.
Previous to cash and investment ISAs becoming interchangeable, you could only place up to 50% of your annual ISA limit into a cash ISA — a limit which was set at £11,520 for the 2013-14 tax year. The Chancellor’s tax-free NISA increase to £15,000, as of July this year, represents a significant rise (£9,240) in the tax-free amount previous cash-only ISA savers can save each year.
Junior ISA limits have also been raised, though at a much lower percentage, from £3,720 to £4,000. In a policy paper published immediately after Mr Osborne’s 19 March 2014 budget, HMRC claimed that 300,000 children under the age of eighteen currently hold a Junior ISA. An estimated six million children across the UK still hold a Child Trust Fund (CTF), the precursor to Junior ISAs, with the savings from a CTF being able to automatically transfer to a Junior ISA (or an adult ISA, should the child have reached age eighteen by then) from April 2015.
Understanding the New ISA
To speak with a professional to discuss how you can get the most from the New ISA, contact us today on 020 8780 2349 or get in touch with us via our contact page to arrange a complimentary, no obligation meeting.
This blog is a general summary. It should not replace professional advice tailored to your specific circumstance.
Annual Investment Allowance Increased to £500,000
Announced as part of Budget 2014 back in March of this year, Chancellor of the Exchequer George Osborne has once again increased the Annual Investment Allowance (AIA) temporarily between 1 April 2014 (for corporation tax, 6 April 2014 for income tax) until 31 December 2015.
In a bid designed to stimulate business investment across the economy by increasing the time businesses have to make relatively heavy investments in plants or machinery, providing valuable assets for years to come, Mr Osborne doubled the AIA to £500,000, a figure that already saw a major increase just two years previous, as the Chancellor noted during his announcement:
“I want to do something today that helps all businesses invest. In 2012 I increased the Annual Investment Allowance ten-fold to £250,000. This generous allowance was due to expire at the end of this year – and all the business groups have urged me to extend it.”
The Social Investment Tax Relief Scheme Explained
In a move designed to help social enterprises access new sources of finance, the Government has unveiled the social investment tax relief scheme, encouraging individuals to support social enterprises by investing funds in qualifying social organisations across the country.
Announced as part of Budget 2014 on 19 March, Chancellor of the Exchequer George Osborne claimed that individuals investing in qualifying social organisations in this manner will receive a reduction of 30 percent of their investment in their income tax liabilities for the year in question.
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Green Taxes and Reliefs for Businesses
The general idea behind the government offering green taxes and reliefs to businesses up and down the land is to encourage you to act in a more environmentally friendly manner; whether you’re a large organisation using a significant amount of energy annually, or you’re a SME that hardly uses any energy at all.
It should be remembered that, at a more general level, you can claim capital allowances when you purchase energy-efficient or low/zero-carbon technologies for your company, reducing your overall tax payments.
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Overview of SMP for Employers
Dealing with and understanding Statutory Maternity Leave and Statutory Maternity Pay (SMP) as a new employer or SME can be difficult, especially if you’ve never had to deal with this issue yourself as an employee at a previous company.
Though we’ll be focusing on SMP in this post, it should be noted that all new mothers have a legal entitlement to take up to twenty-six weeks off around the time of the birth of their baby, regardless of whether or not they are entitled to SMP.
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The Most Tax Efficient Ways to Save for Your Children
If you’re a parent you’ll know how important it is to put some money aside for your children; whether with the intention of using it to help fund them going to university one day, or to start building a safety net for their future.
Problems arise when you start putting money aside and realise that certain tax laws mean a large portion of anything you save will be taken from your savings each year. For this reason, below we have detailed three of the most efficient ways to save for your children, both in the short term, and for their futures.
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What is an ISA? What do the new ISA Rules Mean?
Most of us have heard of an ISA (Individual Savings Account) even if we’ve never opened one, but what exactly is an ISA, and why would you want to invest in one?
Simply put, an ISA is something of a tax wrapper that you can place around a particular account in order to shelter the contents from further income tax or capital gains tax. Because the contents of your ISA won’t be subject to taxation within the ISA itself, the government sets limits on how much you can place into your ISA over a twelve-month period.
As of 1 July 2014, the tax-free ISA limit has increased to £15,000 and there is no restriction on how you invest this; either as cash or shares or a combination of the two - you can decide the amount to be invested in each (up to a limit of £15,000 a year).
Research and Development Relief | R&D Relief
If you’re the owner of a small to medium-sized enterprise (SME), or indeed a much larger company, you may be able to receive Research and Development Relief to reduce your Corporation Tax (CT) when undertaking qualifying revenue expenditure in an Research and Development (R&D) project that’s related to your company or organisation’s trade, or a trade that you’re looking to expand into.
Many conditions must be met by your R&D project for you to qualify for this relief, all of which are outlined in the ‘criteria’ section below. Please note that your company must already be paying Corporation Tax for you to claim R&D Relief.
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How to Claim Expenses if You Work from Home
You’re not alone. Knowing what expenses you can and can’t claim back when working from home can be a headache for many of us, with the complexity of the issue often causing us to not claim back all the reliefs we’re entitled to.
To help shed some light on this complex issue we’ve detailed below six areas that are often at the top of mind when trying to decide upon what expenses can and can’t be claimed back. To ensure you don’t miss out on the tax reliefs you’re entitled to, keep reading.
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