6 April marks the 20th birthday of the Individual Savings Account (ISA).
When the ISA was introduced in 1999, many thought it to be little more than a rebranding of the two schemes it replaced: the Personal Equity Plan (PEP) and Tax Exempt Savings Account (TESSA). The following 20 years have proved ISAs to be much more.
The Chancellor’s Spring Statement was almost obscured by other events in mid-March.
Ever since he announced a move to an Autumn Budget in 2016, Mr Hammond has made it clear that he wanted to avoid the Spring Statement counterpart becoming a mini-Budget. His vision was that in March he would be presenting a brief response to the latest forecasts from the Office for Budget Responsibility (OBR). As the Treasury website stressed, “there will now only be one major fiscal event each year”.
Your April pay may look much the same as March’s, but it is worth giving your pay slip a close look.
If you are an employee, your April pay slip is always worth checking, even if you pay little attention to the other eleven you receive over a year. The items to check include:
Salary Many employers change pay rates from 1 April, often coinciding with the start of their new financial year. If you were notified of a pay increase in March, it is worth making sure the number on the April pay check agrees with what you were promised.
Inheritance tax (IHT) will be slightly reduced for some from 6 April 2019, but greater reforms may arrive soon.
The IHT residence nil rate band (RNRB) increases by £25,000, bringing it to £150,000 for the 2019/20 tax year. In theory that means a married couple can pass on up to £950,000 (2 x nil rate band of £325,000 + 2 x RNRB of £150,000) to their heirs free of tax.
One of the few certainties about 2019 is that the new tax rates and thresholds will take effect from the start of the 2019/20 tax year on 6 April.
Whilst the focus tends to be on year end tax planning at this time of year, it is important to look forward to the new tax year and the changes that it will bring.
From 2019/20 changes will come into effect for key income tax rates and thresholds, as well as pensions.
An issue concerning how the high income child benefit charge (HICBC) can potentially affect stay-at-home parents has emerged.
The HICBC claws back child benefit payments where either parent has income over £50,000 a year, and removes the benefit entirely if either parent has income over £60,000. For couples where one person earns over £60,000 whilst the other stays at home to look after children, it can appear that it is not worth claiming a benefit that is completely withdrawn.
The arrival of the new tax year on 6 April means it is time to consider your Individual Savings Accounts (ISA) investments, which will celebrate their 20th birthday in April.
Over the last 20 years, the maximum annual contribution has risen from £7,000 per tax year to £20,000 for 2019/20. If you managed to set aside the maximum each tax year since 1999/2000, you would now have placed over £205,000 into ISAs and largely out of HMRC’s reach.
The time to resolve has returned.
Have your New Year resolutions fallen by the wayside yet? You know, the ones about eating better, drinking less and exercising more. The problem is they all require you to make a change to your lifestyle, which is never easy, particularly in the dark days of mid-winter.
The Chancellor, Philip Hammond’s last budget before Brexit in March 2019. This budget was hailed as an end to austerity where the Government loosened the purse strings for the first time in ten years. Here are some of the most relevant highlights; (more…)
The popularity of cash ISAs is continuing to wane, according to new statistics from HMRC. With inflation persistently above interest rates, it’s not hard to imagine why.
The bank of England recently increased the interest rate to 0.75%, but inflation was 2.7% in August 2018. This means, if you are holding cash in an ISA or considering topping up an existing account, you need ask yourself two questions: (more…)