Accounting News, Budget & Updates

The Chancellor's last budget was on 19 March 2014.

 

 

Key Data for the 2014/15 Tax Year

Personal Allowance £10,000
Higher Rate Band £31,865
Top Rate Band £150,000
Basic Rate Income Tax 20%
Higher Rate Income Tax 40%
Top Rate Income Tax 45%
Higher Dividend Rate 32½% / 37½%
National Insurance - Employees 12% over £153 per week
National Insurance - Employers 13.8% over £153 per week
National Insurance - Self Employed £2.75 per week plus 9% on profits over £7,956, 
then 2% over £41,865
National Insurance - Voluntary £13.90 per week
Main Company Tax Rate 21%
Small Profits Company Tax Rate 20%
VAT 20%

 

Foster carers

To summarise the tax rules for foster carers in calculating their profits, all income is included in the calculation, but reimbursed expenses can be disregarded.

A tax allowance (qualifying amount) is compared to the income. This is split into 2 elements:

  1. A weekly amount, currently £200 for children under 11 and £250 for children aged 11 and over. For any part week, a full week's allowances are given. A week is defined as Monday to Sunday. Plus
  2. An annual fixed amount of £10,000.

If income is less than the qualifying amount, none is taxable.

If income is more than the qualifying amount, the carer can use one of 2 methods for calculating their taxable profit:

  1. The simplified method - taxable income is the excess of income over the qualifying amount.
  2. The profit method - all income less the actual costs of fostering but excluding all personal costs or elements of shared costs. This would entail keeping detailed records of receipts and payments, similar to other businesses.