Not Just For The Rich – Part 2 [Tax Advice]

The week has flown by and the excitement of the 2014 Budget has come and gone leaving us here at Goodman Jones with plenty of tax consequences and planning to appraise for the coming tax year.

​With that in mind here are some things to consider before we start the tax cycle all over again:-

• Quids in –Most individuals are entitled to a personal allowance each year (£10,000 for the coming year 2014/15) which means that the taxman only get his mitts on income above this amount. For couples, this is a real opportunity to consider your income sources esp. investments and whether you’re making the most of both your personal allowances.

• Check your PAYE code!! – The importance of this has already been highlighted by my colleague Alison Tutt. Read her blog here:

• ISA, ISA baby – Don’t know what ISA stands for? Well, it doesn’t matter. What does matter is that you are putting your savings away in one. Why? Because all the income earned or gains made from an ISA is tax free!

Saving rates for Cash ISAs may seem too low to be worth the bother but the great thing about ISAs is that you can keep contributing into them (subject to a maximum each year, which for 2013/14 is £5,760). So, no matter how big the pot gets any bonus or interest earned in an ISA continue to remain tax free. Junior ISAs are available too.

​Dividends and gains from a stocks and shares ISAs are also free from tax, but always seek advice before investing in one. Although the amount you can invest is subject to an annual maximum (£11,520 in 2013/14 but reduced by any amount paid into a Cash ISA in the same tax year) anybody investing in the stock market should have one.

​NOTE: In the 2014 Budget it was announced that ISAs are set to become even better from 1 July 2014 when they become New ISAs (NISAs). The annual maximum investment in a NISA is £15,000 and this can be invested in a Cash or Stocks and Shares NISA or a combination of both.

​Freebies part 3 next week.