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Budget 2014

Budget 2014: Employment related matters

There have been no changes to the rates of NIC. The employment allowance that commences on 6th April and is £2000 per employer (for almost all employers) and is to be claimed through RTI processes each month.

The point at which employers pay NI and at which employees pay NI is being “harmonized” at £153 per week and this means that the magic salary number is now £663 per month.

Directors Loan account balances are currently considered a benefit in kind if no interest is charged on the balance by the company. Any amount in excess of £5000 is taxable in this way. The limit is increasing to £10000 from 6th April 2014. Please note though that these amounts are still subject to S455 tax at 25% and which is payable by the company

Childcare costs

Something useful and practical – the existing childcare voucher scheme is to be phased out and be replaced with a targeted tax relief.

It will allow tax relief at basic rate to be claimed at up to £10000 per child provided both parents work and earn less than £150,000 each. This is worth up to £2000 in real tax savings per child aged from 0-5 years and later to be extended to 12 years of age.

The bad news is that it doesn’t start being phased in until Autumn 2015

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