Improving beats moving
There is evidence that more homeowners are choosing to improve rather than move, says the Mail. Residential property transactions for the year to March 2017 were £239 billion, down from £273 billion the previous year – the first fall since the financial crisis a decade ago. The higher levels of stamp duty are one deterrent for movers, says the Mail.
Inflation beats cash ISA savers
There is no single cash ISA account paying interest at more than the latest UK inflation rate of 2.9 per cent, says the Mail. The best accounts pay little over 1 per cent, which means savers are 1.9% per cent worse off in real terms at the end of a year. A year ago, when inflation was 0.6 per cent, it was easy to get a positive return from cash ISAs.
How to get your child benefit back
Thousands of families can get back some or all of the child benefits they have lost, says the Mail. Since 2013, those earning over £50,000 start to lose child benefit and those earning over £60,0000 lose all of it. Some 300,000 families are caught in this way but many could get their benefit back, says the Mail. For example, someone with three children earning £60,000 who paid £3,000 into a pension plan would get an extra £750 of child benefit.
Mortgage debt time bomb
Many young families are sitting on a mortgage debt time bomb, warns the Mail. Mortgage lending to people paying a deposit of between 5 per cent and 10 per cent for their homes and borrowing three times their earnings were £2.2 billion in the three months to July 2017 – almost ten times the level in 2010. And if, as some economists predict, the Bank of England base rate rises to 0.75 per cent by Autumn 2018, the repayments on a £150,000 mortgage will rise by £520 a year.
More caught by lifetime pension allowance
Many more people are being caught by the ‘lifetime allowance’ for pensions, says the Telegraph. It has been reduced in stages from £1.8 million to £1 million in recent years, and there is a tax charge of 55 per cent on any excess. While £1 million sounds a lot, the Telegraph says that this is the notional value of a final salary pension of £50,000, which many long-serving employees at middle-ranking and senior levels will be entitled to. In addition to this, high earners may fall foul of the annual allowance and will need advice to deal with the complexities.
Soaring housing costs hit millennials
People aged 20-30 – the ‘millennials ‘- are devoting 23 per cent of their income to housing costs, reports the BBC. This compares with a typical 17 per cent for their parents and with just 7 per cent for those now aged 70-80. The numbers come from the Resolution Foundation, which describes Britain’s housing market as a catastrophe.
HMRC collects more from tax avoidance
HMRC collected £1.3 billion from Accelerated Payment Notices in the last tax year, a fifth more than in the previous year. With APNs, those involved in disputes over the legitimacy of tax schemes must pay their tax up front and will only get it back if the investigation and, if necessary, tribunals and appeals are completed in the taxpayer’s favour.
UK SMEs lag the pack
A survey of small and medium sized enterprises (SMEs) in the US, the UK and Europe shows the UK lagging the pack, says the Telegraph. While 72 per cent of US firms had seen growth in revenues, the UK figure was 61 per cent. And while on average 71 per cent of firms were optimistic about prospects for the next year, the figure for UK firms fell from 60 per cent to 55 per cent.
As tax year end approaches, there is still time to make use of your available reliefs and allowances.
This tax year end planning checklist covers the main planning opportunities available to UK resident individuals and will hopefully help to inspire action to reduce tax for the 2023/24 tax year and to plan ahead for 2024/25.
As tax rate band thresholds are changing, understanding the impact on high rate taxpayers and the economy is crucial.
It was recently revealed in the media that the amount we need to enjoy a ‘moderate’ retirement has increased by £8,000 per annum, a 38% increase, in just one year.