This was billed as a budget for ‘makers, doers and savers’.  Recent years of recession mean that many probably feel they have been making do and not saving!

Before even beginning to think about making long-term use of the various savings incentives offered, self-employed taxpayers need to know that they are saving enough short-term to pay their tax under Self Assessment.  HMRC offer the facility to make regular (ie early) payments if wished, but neither this nor saving into your own account give much comfort if the amount saved is too little.  In terms of setting money aside for tax bills, the good news is that the proportion of income/profits which most of my clients pay over in tax should stay similar or possibly even drop slightly over the next two years.  I am happy to do a rough calculation at any point based on estimated figures for clients wanting to check that they are saving enough for their tax bills.

Key rates and allowances are shown in the ‘Budget News’ page (select above).

Pension rules are set to become a great deal less restrictive during the next year, particularly in terms of how a pension may be drawn on retirement.

Not in the budget, but important for anyone owning a second property, is a change to principal private residence relief.  The time during which you can live elsewhere before selling a former home tax-free falls from three years to eighteen months.

If you have any questions following the Budget, do contact me.

Those who have been hardest hit by Class 1 NICs deducted from ad hoc session payments will already know from me that HMRC are stopping this treatment.  From this April this should remove the need to sign up as an ’employee’ of an organisation you might work for for as little as three hours.  Some freelance performing work may still be subject to NI at source: where this happens, please keep a note of which fee this related to.  We declare the gross amount (before NI was taken off) in your accounts and can usually get credit for the NI deducted in your tax return, to limit other NI you pay.

For clients with salaries or fees paid under Pay As You Earn (PAYE), with tax deducted, I have noticed problems during the last year in several cases either with incorrect tax codings or with correct codes not applied properly. This has meant in two cases that most of the earnings are kept in tax when they shouldn’t be. This gets corrected eventually through the tax return if left, but this is not a practical solution if it involves a large proportion of a client’s income.
Some problems seem to have been caused by employers moving to ‘Real Time Information’. Where you do work paid through a company’s payroll, please check any payslip carefully. If there is any change to your coding, or if the amount you receive is very different from what you expected, do let me know. It can take a while to sort out but I will do anything I can to help.

Please get information to me as soon as you can now for the 2013 tax return, due in with payment to HMRC by 31 January.

New for this return are questions for anyone whose household received child benefit between January and 5 April 2013.  Please check the amount received, even if it was not paid into your own account.

Thank you.

On the 2013 tax return, all taxpayers need to show whether they or their partner/spouse received child benefit up to 5 April 2013.  For those families who did, there are then further questions, including one relating to the income of your partner/spouse.  I’ll therefore be asking all my clients with children the questions to check whether they will need to pay the ‘higher income’ child benefit charge.

I am adding information from today’s Budget (from the Budget Press Releases rather than the Daily Mail) most likely to be relevant to my clients.  I am also updating details of the information I’ll need for your 2013 tax return.  Please see Budget News and 2013 Tax Returns tabs above.  Anyone wanting particular advice on action to take before 5 April 2012, do contact me – but any changes meaning that urgent action is advisable, then I’ll be in touch with individual clients affected.