New Tax Year 2014-15, Check your Tax

6 April 2014 is the first day of another Tax Year, 2014-15 and it is a good time to check that HM Revenue and Customs are giving you the correct Personal Allowance ie the amount of income you can receive before you pay tax.

Personal Allowances now depend on your date of birth. If you were born after 5 April 1948 your Allowance is £10,000. If you were born between 6 April 1938 and 5 April 1948 your Allowance is £10,500. If you were born before 6 April 1938 your Allowance is £10,660. These latter 2 Allowances have been frozen and are the same as 2013-14 Tax Year. Also you only get the full benefit of these higher allowance for older people provided your income is less than £27,000

A Married Couples Allowance is available where one spouse/civil partner is born before 6 April 1935. This is a maximum of £8,165 and minimum of £3,140 again depending on your income and reduces your tax by 10% of the amount of Allowance you are eligible for.

Blind Persons Allowance is available where you are not able to undertake any work for which eyesight is essential. This is £2,230 and can be transferred between spouses/civil partners.

Basic Rate of Income Tax is 20% which is the rate you pay at up to a limit of £31,865 of taxable income, after which it increases. However there is a starting rate of 10% which applies to Savings Interest only up to a limit of £2,880. This only applies where you income exceeds your Personal Allowance and taking into account all your non-savings income first, your saving income remaining falls within £2,880 of your Personal Allowance. If your Savings Provider has been deducting Tax at 20% from your Interest and you fall into this Starting Limit of 10% you are due a Refund from HMRC.

Make sure you check that all your Income is known to HMRC and remember that State Pension forms part of your taxable income.

The 2014 Budget changed the rules in respect of small personal pension pots by increasing the amount which can be taken as lump sums subject to the same tax rules as before.

The same Budget also increased the limit for investing in ISA's form 1 July 2014 to £15,000 in any mixture of stocks and shares and cash.

If you are a pensioner (or approaching retirement) and on a low income the Charity    Tax Help for Older People can offer FREE support and guidance to help you to understand your tax, complete any necessary paperwork and liaise with HMRC.

Call on 0845 601 3321 or 01308 488066

Email on [email protected] or

Use the secure link on our website - www.taxvol.org.uk

Registered Charity No 1102276