National Living/Minimum Wage Changes from 1 April 2017

From 1 April 2017 the National Living/Minimum Wage rates will increase as follows:

  • £7.50 an hour for workers aged 25 and over – previously £7.20
  • £7.05 an hour for workers aged 21 to 24  – previously £6.95
  • £5.60 an hour for workers aged 18 to 20 – previously £5.55
  • £4.05 an hour for workers aged 16 to 17 – previously £4.00
  • £3.50 an hour for apprentices under 19 or in their first year – previously £3.40

If you are paying any employees with reference to the National Living/Minimum Wage you will need to amend the hourly rates accordingly.

If you have any questions on the above, please do not hesitate to contact us 

 

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Are you a parent? What are your childcare choices?

In our Winter 2016 newsletter we led with an article about the new Tax-Free Childcare scheme that was expected to be launched in early 2017.

HM Revenue and Customs have today launched the Childcare Choices website which can be reached from the related article:

https://www.gov.uk/government/news/uk-families-will-soon-see-bills-cut-as-date-announced-for-the-launch-of-tax-free-childcare

The article also gives details of the availability of up to 30 hours of free childcare for 3 to 4 year olds from September this year.

We understand that parents can pre-register from Wednesday, with the new scheme launching at the end of April.

If you require any further information or advice then please contact us 0116 2423400 

Neil Fordintro-desktop-full

Spring Budget 2017

I am sure that you have seen the headlines in the papers this morning about the Budget and for a detailed analysis please see the report on our website:

www.torrwaterfield.co.uk/news/budget-report.

The items that have caught my attention and I think are relevant to most people are as follows:

National Insurance for the self-employed

At present, if self-employed, you pay class 2 National Insurance of £145.60 for a complete year, and class 4 at 9% based on your level of profits.  The Government do not think that this is fair as employees pay National Insurance at 12%.  To level this position, class 2 National Insurance will be abolished from 06/04/2018 and the class 4 element will increase to 10% from that date, and to 11% from 06/04/2019, thus bringing the self-employed more in line with the employed.

Dividend changes again …

From 06/04/2016 broadly the first £5,000 of dividend income is taxed at 0 % (Dividend Allowance).  This will continue until 05/04/2018.  However, from 06/04/2018 the Dividend Allowance will reduce to £2,000.  This will mainly affect the family company shareholder and increase their tax liability as follows:

Basic rate taxpayer – additional tax of £225

Higher rate taxpayer – additional tax of £975

Additional rate taxpayer – additional tax of £1,143

Individual Savings Accounts (ISAs)

 The overall limit is increasing from £15,240 to £20,000 on 06/04/2017.

Property and trading income allowances

Although this was mentioned last year it comes into play on 06/04/2017. It is as it says, so if you have property or trading income of £1,000 or less you will no longer need to declare this or pay tax on it.  This could cover small amounts of rent from Air ‘bnb’ activities or trading on ebay. 

New Childcare provisions

 If you are taking out new childcare provisions from 06/04/2017 then, instead of opting for a salary sacrifice scheme and receiving vouchers, for every 80 pence that you contribute the Government will contribute 20 pence. The maximum the Government will contribute will generally be £2,000.

Making Tax Digital

This will be introduced on 06/04/2018 for businesses, the self-employed and landlords who have profits chargeable to Income Tax and pay Class 4 National insurance Contributions where their turnover is in excess of the VAT Threshold, which will be £85,000 from 01/04/2017.

As this is a very new area please contact us for further information.

Salary Sacrifice

 From 06/04/2017 this is changing, but it is still beneficial for both the employer and employee to sacrifice salary in respect of employer provided pensions, childcare vouchers, workplace nurseries and cycle to work schemes. 

Construction Industry

The government are launching a consultation on 20 March 2017 to look at various areas, including the qualifying criteria for Gross Payment Status and options to combat VAT supply chain fraud in supplies of labour.

In addition to the above, certain other changes come into force on 06/04/2017 that have been mentioned in earlier Budgets namely:

Restrictions on residential property interest

Landlords will no longer be able to deduct all of their finance costs from their property income.

Inheritance Tax residence nil rate band

There will be an additional nil rate band for deaths on or after 06/04/2017 where an interest in a main residence passes to direct descendants.

As mentioned above I have only mentioned the areas that I believe will be most relevant to the majority of our clients but other areas can be found on our website.

Please contact us if you have a specific query. 0116 24243400

Julia Harrison, Tax ManagerJulia Harrison April 2012

Torr Waterfield’s 2017 charity of the year – Alzheimer’s Society

Every year we support a different charity and this year it is the Alzheimer’s Society.

I think most of us know friends or family that have been affected by dementia. Currently around 850,000 people in the UK have been diagnosed and of those, 42,000 are under 65. This total is predicted to rise to over 1,000,000 by 2021. Living with dementia has huge emotional, social, psychological and practical impacts on not only the sufferer but also on their family; one of the saddest things a person can do is watch their loved one become upset as they “disappear”.

The vast majority of causes at present cannot be cured, although there are some drug treatments available which may help slow down the symptoms. However with care and support someone who has been diagnosed with dementia can live well. The Alzheimer’s Society aims to raise £1 billion over the next 10 years in order to achieve their 3 main goals:-

Support and advice service– in whatever way is needed either face- to-face, telephone or online advice and by 2022 to reach out to everyone at time of diagnosis.

Increase public awareness – so that people with dementia are treated as equal members of society, ending the stigma associated with the condition.

Research – investing in the UK’s first dedicated Dementia Research Institute as well as in biomedical, prevention, assistive technology and care research.

So we want to help by raising as much money as we can and there will be lots of opportunities to help us support this national charity throughout the year – more details to follow later.

If you would like to know more please visit www.alzheimers.org.uk

Denise Burley, Accounts & Tax In_aid_of_Alzheimers_logo.jpg

Time for new change

As you may or may not be aware The Royal Mint has revealed that a new issue of the £1 coin is to take place and is set to be released on 28th March 2017.

So why change?

Approximately 1 in 30 £1 coins are counterfeit – this in itself is a fairly high amount.

However, when you put this ratio into the estimated amount of £1 coins in circulation it is staggering.

As of March 2014, The Royal Mint estimated that there were 1,553,000,000 £1 coins in circulation of which 3.04% were counterfeit – meaning that there is around £47,211,200 of counterfeit £1 coins in circulation. The new coin should be considerably more difficult to attempt to fake due to a number of new features.

What are the features?

12-sides – New distinctive shape – making it instantly recognisable.

Bimetallic – it is made of two metals. The outer ring is gold coloured (nickel-brass) and the inner ring is silver coloured (nickel-plated alloy).

Latent image – it has an image like a hologram that changes from a ‘£’ symbol to the number ‘1’ when the coin is seen from different angles.

Micro-lettering – it has very small lettering on the lower inside rim on both sides of the coin. One pound on the obverse “heads” side and the year of production on the reverse “tails” side, for example 2016 or 2017.

Milled edges – it has grooves on alternate sides.

Hidden high security feature – a high security feature has been in built into the coin to protect it from counterfeiting in the future.

When will this happen?

The new coins will be introduced on 28th March 2017 leading to a co-circulation period where both old and new coins will be accepted. On 16th October 2017 a demonetisation period will begin where the old £1 coins are under no obligation to be accepted and should not be redistributed – they can however be deposited into most high street banks.

How can it affect my Business?

If you have a cash handling business then you need to ensure all machines that accept pound coins are compatible with the new design and if not, then your machinery supplier needs to be contacted as a matter of urgency. Once October 2017 comes around you have the right to refuse the old style one pound coins as this is the beginning of the demonetisation period. As mentioned above, once this time comes, do not worry, as the old style pound coins can be deposited into most high street banks for a significant period of time.

The pound won’t be round for much longer…

If you would like to discuss this more please contact us 0116 2423400

Brook Lucas, Accounts & Tax 

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