HICBC: Protecting the state pension for stay-at-home parents

The HICBC may cause national insurance problems for stay at home parents.

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…

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Happy twentieth birthday to tax-free savings

Tax free savings is celebrating its twentieth anniversary in 2019

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 20thbirthday 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…

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Money pouring int​o venture capital trusts, despite the risks

VCTs have been growing in popularity in recent years, as the graph shows. Nearly £750 million was invested in VCTs in 2017/18, the highest figure since 2005/06, when the rate of income tax relief was temporarily boosted to 40% (against the current 30%). There were two main reasons for the surge in popularity in the…

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Global markets – the 2018 investment year

global markets fell in 2018

The world’s share markets mostly saw falls in 2018.  2018 was a very different year for investors from 2017. During that year, the global markets generally produced positive returns with very little volatility. Both years had their fair share of dramas, with Brexit and Donald Trump sources of concern across the 24 months. However, whereas…

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Self-employed pensions – filling the hole

self-employed pensions

The Department for Work and Pensions (DWP) is aiming to expand coverage of self-employed pensions.  Pension automatic enrolment has become a major success since it was launched nearly seven years ago, with almost ten million people joining a workplace pension arrangement. Take-up rates have been much higher than some pundits had forecast – the latest calculation from…

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Understanding the Child Benefit Charge

Child Benefit Charge

January 7 marked the fifth anniversary of the Child Benefit Charge – a tax on child benefits, an imposition that is still not widely understood.  The High Income Child Benefit Charge (HICBC), to give child benefit tax its correct name, was introduced in a rush by George Osborne – so much so that it began…

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Shake up your New Year’s resolutions

New Year resolutions

Some people prefer to talk about intentions rather than new year’s resolutions. And to try to look beyond the short-term goals to longer term outcomes to boost the likelihood of sticking to them.  Here are four simple financial New Year’s resolutions. They need only one-off actions, so they should be easier to stick to. And…

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New earnings thresholds for auto-enrolment

Tax levels are changing for auto-enrolment pensions

In early December the Department for Work and Pensions (DWP) announced the thresholds that should apply to automatic enrolment pension contributions from 6 April 2019. We say ‘should’ because, strictly speaking, they need final approval from the Secretary of State, although any change is extremely unlikely. There are three key levels to be aware of:…

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Office of Tax Simplification’s first report on inheritance tax

Inheritance tax review

The Office of Tax Simplification (OTS) has published the first part of its inheritance tax (IHT) simplification review. The report highlights a variety of issues with the current IHT system: Inheritance tax returns are submitted for about half of all estates, even though tax is paid by less than 5%; Most of the paperwork cannot…

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Index-linked National Savings certificates

Index linked national savings certificates

The popular National Savings & Investments (NS&I) savings certificates will be indexed to CPI instead of RPI from next year. The certificates have not been on sale since 2011, but NS&I allow existing certificate holders to reinvest in new series of certificates when their old ones mature. The terms have gradually worsened over the years…

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