George Osborne had lots of good news for savers and small business. Plus, new tax rules that could leave you better off…
The Autumn Statement has some interesting new plans on state pension age and taxes on small businesses. But how will these measures affect your life?
Will I have to work longer?
It depends. If you want to claim a state pension and youâre in your 20s, 30s or 40s at the moment, then yes. Sorry about that. Those in their 20s will need to wait until theyâre 70 to claim their state pension, those in their 30s will have to wait until theyâre 69 and, if youâre in your 40s right now, itâs 68.
And once I retire to my desert island in the sun?
If youâre lucky enough to have a couple of homes in the UK and live abroad, youâll have to pay Capital Gains Tax (CGT) for future gains on second homes bought in the UK from April 2015. At present, these folk donât pay CGT in this way, unlike UK residents.
As a UK resident, the last three years before selling a second home is disregarded when it comes to calculating a CGT bill at present. But now that period will now cut to 18 months. Spoilsports.
Is there any good news?
You can save more tax free! The ISA, Junior ISA and Child Trust Fund allowances have all increased. For ISAs, the cap is now Â£11,880 for 2014-15, half of which can be saved in a cash ISA. The annual limit for Junior ISAs and Child Trust Funds (CTF) for 2014-15 will increase to Â£3,840. Thatâs a nice chunk of tax-free savings.
And while our personal tax allowance from the Chancellor hasnât gone up â itâs still set at Â£10,000 for next April â married couples can now benefit from an allowance that lets you transfer Â£1,000 of your income tax allowance from one spouse to another. This is great news if youâre a basic-rate taxpayers, it means youâll save up to Â£200 between you.
Any help for small businesses?
Small business owners can breathe a sigh of relief as business rates are being capped at 2 per cent instead of being linked to inflation. Also, business rate relief for small firms will be extended until April 2015.
Plus, if youâre an employer, youâll be entitled to a break from National Insurance contributions when employing workers under 21. Also, from April a new tax relief will be introduced for investing in social enterprises and new social impact bonds.
How can I make the most of these changes?
The best route is to talk to a professional adviser. They will know exactly how you can benefit from these changes and put a plan in place for the long term. Speak to a professional financial adviser who specialises in tax or an accountant to ensure youâre being as tax efficient as possible and in line with current HMRC rules.
Use our Tax Waste Calculator to work out how much money you could be wasting. It’s quick to use and easy to remedy.