|
Allowance |
Age |
Tax year
ending 5 April |
Amount |
|
Personal |
up to 65 |
2001
2002
2003 |
£4,385
£4,535
£4,615 |
|
65 to 74 |
2001
2002
2003 |
£5,790(1)
£5,990(1)
£6,100(1) |
|
75 Plus |
2001
2002
2003 |
£6,050(1)
£6,260(1)
£6,370(1) |
|
Married Couple's(2) |
65 - 74
66 - 74
Age 65
before 6 Apr 2000 |
2001
2002
2003 |
10% of £5,185(1)
10% of £5,365(1)
10% of £5,465(1) |
|
75 Plus |
2001
2002
2003 |
10% of £5,255(1)
10% of £5,435(1)
10% of £5,535(1) |
|
Blind person's |
any |
2001
2002 |
£1,400
£1,450 |
|
Widow's bereavement(3) |
any |
2001
2002 |
10% of £2,000
no allowance |
|
Children's tax credit |
any |
2001
2002 |
no allowance
10% of £5,200(4) |
|
WFTC |
any |
2003 |
Basic tax credit of £60 a week
Extra £11.65 if 1 partner works at
least 30 hours a week.
Tax credit for ea child of £26.45
from birth. £27.20 from the Sept
after 16th Birthday until the day
before 19.(5)
Childcare tax credit of up to 70% of
eligible childcare costs to a max of
£135 a week for one child and £200 a
week for 2 or more children. |
(1) The amount of these allowances
is reduced if total income is above
a certain amount. In the tax year
ending 5 April 2001 the allowances were reduced if total income was over £17,000
and in the tax year ending
5 April 2002 the income limit is
£17,600.
(2) From April 2000, this allowance
was abolished for people born on or
after
6 April 1935.
Where the allowance received by an
older person is restricted because
of income - see note (1) above - it
will not be reduced below £2,000 in
the tax year ending 5 April 2001 and
£2,070 in the tax year ending 5
April 2002.
(3) This allowance is abolished for
deaths occurring after
5 April 2000. Where death occurred during the tax year
ending
5 April 2000, the widow also
received the allowance in the tax
year ending 5 April 2001.
(4) But the credit is reduced by £2
for every £3 by which your income
exceeds the higher-rate tax
threshold.
(5) Is reduced by 55p for ea £1 of
net income above £94.50. Savings
are less than £8,000 but savings
above £3,000 are taken into account
in assessing your income. It is
assumed you earn £1 a week from ea
£250 of savings above £3,000. |
STARTING YOUR OWN BUSINESS
Tax Information
Stake Holder Pensions
The Government in setting up the stake holder
pension has insisted that pension companies
which sell the stake holder pension do so within
the 1 per cent charging cap. Other charges are
to be dropped. However check the small print
carefully. The stake holder pension is open to
virtually everyone in the UK. Also all
contributions into stakeholder and personal
pensions will receive immediate basic-rate
income tax relief, regardless of whether the
beneficiary has an income tax bill to offset
against the payment. The most anyone can put
into the stakeholder in a year is £3,600 but
with tax relief the cost drops to £2,808.
Higher tax-rate taxpayers will be able to claim
additional tax relief - making the cost just
£2,160. As, under present rules, the
stakeholder cannot be cashed until retirement it
makes a good gift for your children!!
Are you self-employed?
The inland revenue take this to mean those
people who run a business on their own, or in
partnership with one or more people and who work
for themselves, and not working for an
employer. For more details see leaflet
IR56/N139 which can be obtained from your local
tax office.
Who do you need to tell
Well, your local tax office, the contributions
agency, customs and excise (vat) - if your
taxable income is more that £52000 per annum -
and your job center if you are registered with
one.
There is a form for telling your tax office etc
that you have become self-employed and it is
CWF1 - Notification of self-employment -
obtainable from your local tax office which must
be completed and returned to your tax office
within 3 months of starting self-employed.
Accounting Date
This is up to you. It can be to the end of your
first year's trading; to the end of a particular
month; for the calendar year ending on 31
December, or to the end of the tax year on 5
April. If you expect your profits to be on the
high side then seek advice about when your
accounting date should be. Likewise if you are
unsure about anything - get advice first (our
clients receive free advice) - in the long run
you will be glad you did.
The Tax Return
Each year, in April you will receive a tax
return asking for information about your profits
(if any) etc. You can complete the return
yourself - instructions are provided with the
tax return - but if you have any doubts or
problems about what to enter you can contact the
tax office for advice or better still become a
client of Prime Advisors.
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