budget

Spring Budget 2017

Today, the Chancellor of the Exchequer Philip Hammond will deliver his Spring Budget. It is not expected that there will be any big surprises – no big changes in policy. However, he will be laying the groundwork for a further budget in the Autumn, which is likely to include more significant changes. This is the last Spring Budget, as future budget announcements will take place in the Autumn.

Changes to your take home pay from April 2017 have already been announced and you can compare 2016 and 2017 tax years on The Salary Calculator tax year comparison. The personal allowance (the amount you can earn tax-free) has been increased by £500 to £11,500 and the threshold for higher rate tax has increased by a further £1,500.

Perhaps the biggest change this year is the introduction of different income tax in Scotland – the Scottish Parliament’s budget controls the thresholds and rates for those who live North of the border, and from April 2017 different thresholds apply. The threshold for higher rate tax (£43,000 in the default case) is not increasing in Scotland, whereas in the rest of the UK it will be £45,000. This means that those earning over this threshold will pay more tax if they live in Scotland than if they live elsewhere. You can see this difference in The Salary Calculator if you enter a Scottish tax code or tick the box for Scottish residents (remember to choose the 2017/18 tax year in the drop down box!).

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None of the content on this website, including blog posts, comments, or responses to user comments, is offered as financial advice. Figures used are for illustrative purposes only.

Budget 2016

Tomorrow, the Chancellor of the Exchequer will deliver his annual budget to the Houses of Parliament. We have already heard about some possible announcements (such as the introduction of a scheme to help people increase their savings), and we have been told that there will be no changes to pension tax relief (which looked likely, for a while).

From 6th April, the new tax year means changes to tax-free personal allowances, tax thresholds and the like. The Salary Calculator has been updated with the latest values so you can see what your payslip will look like from April onwards. The personal allowance has been increased to £11,000 per year, which will reduce the tax due for most people. There are changes to National Insurance this year, too – since it is no longer possible for a pension to be “contracted-out” (earning a reduction in NI contributions), those of you who had one of these pensions will be paying the full NI contributions from 6th April.

If you would like to see how these changes will affect you, head over to The Salary Calculator to see what difference it will make to your payslip!

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2016 Tax rates available!

The Salary Calculator has been updated with the latest tax rates, which take effect from 6th April 2016 – so you can now see how the changes will affect you. Just head over to The Salary Calculator – 2016 take home pay calculator, enter your details and remember to choose the “2016/17” tax year in the drop-down box.

The tax-free personal allowance has been increased by £400, which will reduce the amount of tax most people pay. However, from April 2016 those who have been paying into a pension scheme which is “contracted out” of the additional state pension will find that their National Insurance contributions go up. This is because from April it will no longer be possible to contract out of the pension, so the National Insurance reduction that this gave you no longer applies.

You can try out the 2015 and 2016 take home comparison calculator and see side-by-side how your payslip is likely to change in the new tax year.

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Budget 2015

The Chancellor gave his pre-election budget earlier today – announcing his plans for forthcoming years. With an election just around the corner, this budget is even more of a sales pitch than usual – most of the changes he announced would only come to pass if the Conservatives were to be in government for the next term.

From a personal taxation point of view, the most significant announcement was arguably the plan for the first £1,000 of interest earned on savings to be tax free, effective April 2016. This will allow almost everyone to pay no taxes on their savings interest (those with high incomes from elsewhere will have this £1,000 limit reduced, possibly to zero), but the amount saved each year for most people is likely to be only a few pounds – and at most £200. There is also a plan to raise the threshold for the higher rate tax (the point at which income tax increases from 20% to 40%) ahead of inflation – an effective tax break for those on good middle-class incomes.

The Salary Calculator has already been updated with the tax rates which take effect from April 2015 so you can see how your pay packet will change next month. You can also compare 2014 and 2015 tax rates side-by-side to see where the differences come in.

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2014 Budget

Later today, the Chancellor will deliver his 2014 Budget to parliament, setting out his plans for the next few years. The Budget is the Chancellor’s opportunity to explain his policies and how they will affect the economy as a whole, and also what differences will be felt by ordinary members of the public.

He is likely to make much of the fact that the tax-free personal allowance (how much you can earn without paying income tax) has increased to £10,000 from April 2014, a coalition pledge delivered 1 year early. There is also talk that he might announce plans to raise the threshold for 40% tax (the amount at which you start paying income tax at 40% rather than 20%) in future years. This would probably lower the tax paid by those in middle management positions, say, and those in more senior roles.

The income tax and National Insurance rates which will take effect from 6th April 2014 have already been applied to The Salary Calculator, so you can easily see how your take home pay will be affected by the new tax year. You can also view a side-by-side comparison of 2013 and 2014 so you can see where the differences come from.

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