If you have recently purchased or are in the process of buying a new car, you will know that new rates of Vehicle Excise Duty (VED) apply for purchases of cars first registered on or after 1 April 2017. Most of the rest of the population may be surprised how significant the changes are. The big changes are the charges that apply in the year of purchase of the car. As with the system that applied to cars registered before 1 April 2017, the charges are based on CO2 emissions but the new charges are typically much higher than under the old system. For example a car with CO2 emissions of 175 jumps from £220 to £800. But in year two, the new system swings in favour of such a car owner as the charges are not based on CO2 emissions. If the car runs on petrol or diesel there is a fixed charge of £140 and an additional rate of £310 if the car has a list price of more than £40,000.
It is now over two years since the Marriage Allowance was introduced and perhaps it is no surprise to learn that most people who are eligible have not claimed the allowance. The allowance lets certain individuals transfer 10% of their personal allowance to their spouse or civil partner. This reduces the tax bill of the recipient of the transfer by up to £212 in 2015/16 and up to £220 in 2016/17. So for anyone who hasn’t claimed it yet, they may be due a tax repayment of up to £432.
A new term has been invented by the government to reflect the central role of businesses in the Making Tax Digital project – Making Tax Digital for Business – and a new acronym – MTDfB. There are different start dates for businesses however. Unincorporated businesses, including landlords, will be the first to see significant changes in their recording and submission of business transactions.
We are used to most tax changes being made from April each year but one tax – Insurance Premium Tax (IPT) – is an exception. The standard rate of IPT is to rise from 10% to 12% with effect from 1 June 2017. The latest increase will mean that the rate of IPT will have doubled in just over 18 months. It was only 6% in October 2015.
It was almost two years ago in the Summer Budget 2015 that the then Chancellor, George Osborne, announced restrictions to income tax relief for interest costs incurred by landlords of residential properties. The proposals became law in November 2015 but it is only from the 6 April 2017 that these provisions came into effect.
- Tax-Free Childcare will soon be available to working parents
Tax-Free Childcare will provide up to £2,000 a year in childcare support for each child under 12.
Parents will be able to receive up to £4,000 for disabled children up to the age of 17.
Parents of younger children will be able to apply for the scheme first, with all eligible parents able to access the scheme by the end of the year.
Working parents in England will also be able to apply for an additional 15 hours of free childcare for three and four year olds, bringing the total to 30 hours a week.
Continue reading Top 6 Points to take away from the Spring Budget
The state pension is clearly a worthwhile thing to have, particularly for the self-employed who will receive a pension through the new ‘flat rate’ pension. However, there have been numerous changes to the qualification criteria over recent years and now may be a good time to check your entitlement.
One thing which is worth bearing in mind is that it is the individual’s obligation to keep track of their own entitlement and ensure that it is correct, although most people do not appreciate that. Keeping track of this over a working life is difficult but rectifying problems with the state pension at the point of retirement can be even more difficult, so a quick check of your position once every four or five years is time well spent.
Yes, to a separate/dedicated bank account
The simplest answer is no it does not have to be a ‘business’ bank account, that will depend on the individual bank’s criteria for bank accounts. However, the business should be operated from a separate/dedicated bank account from your personal finances. At the beginning of a new business venture it may be tempting to leave this aspect until a point when the level of financial transactions taking place would justify a separate bank account, this might not be the best of choices. As your business grows and expands, it’s extremely important to separate your business finances from your personal, day-to-day living. The beginning of a business can be a time where all your business transactions can be expenses. Ideally, you would open a separate bank account and pay in any funding received either via grants, loans or your investment. This clearly shows the capital being input into the company and then the expenses will also be clearly identified in the outgoings of the account.