by Michelle Bourne | Nov 29, 2017 | national insurance, PAYE, Personal Allowance
So the Chancellor has raised the Higher Rate income tax personal allowance threshold from £45K to £46,350 from April 2018, and the Lower Rate Threshold will increase by £350 to £11,850.
This means that the new tax codes will increase from 1150L to 1185L in April 2018.
For a typical worker who pays tax in 2018-9, this will be a £1075 reduction in their tax paid, and a Full time Worker who is on the National Living Wage will take home more than £3,800 extra in their wage packet.
But is this good news for the typical worker? Well, the increase in personal allowance may be less generous than you think, since at just over 3%, it was only just in line with inflation!
Given that National Insurance is payable at a rate which is more than £3K below that of income tax, the lowest paid taxpayers may query whether the increase in personal allowance is the right way to support them?
Let me know your thoughts!
by siteadmin | Sep 14, 2016 | PAYE
Over half a million company car drivers face increased tax bills under a proposed crackdown on valuable perks by the Treasury.
Salary sacrifice schemes allow employees to exchange some of their taxable pay for benefits, such as company cars and phones. It cuts down the employees tax and National Insurance bill each month, and employers end up paying less National Insurance for the employee.
The proposed rules could come in to play as soon as April 2017. Under the proposed new plans, workers would be taxed on the full amount of salary sacrificed, meaning there would be little point in having a salary sacrifice scheme in place.
Only a few benefits will be excluded from the plan, notably pensions saving, childcare and cycling safety equipment.
The crackdown will also include other benefits, such as gym memberships and car parking spaces.
The Treasury said that the proposal does not prevent employers from providing benefits in kind to their employees through salary sacrifice, but it will remove the tax and NICs advantages that come from doing so.
