Entitlement to state pension is calculated on the basis of the number of years you make NI contributions (or receive NI credits through benefits such as incapacity benefit) divided by the number of years you could have made contributions (currently 44 years for men and 39 years for women).
From 6th April the government has awarded Home Responsibility Protection (HRP) to all registered foster carers. Each financial year a person is entitled to HRP takes one year off the number of years they could make NI contributions.
A woman with less than 19 years HRP or a man with less than 24 years HRP will be able to add HRP years.
If you have a gap in your contributions record, by making NI contributions (Class 1 or Class 2) you will be adding to the actual years of contributions whilst at the same time HRP may be reducing the possible years.
For the tax year beginning this month there will be a tax exemption available to carers with gross receipts (total of boarding out allowance, additional expense payments, special needs payments, fee/reward payments etc.) below a certain threshold.
The threshold will be made up of two elements – a fixed amount per year (which for 2003/04 will be £10,000) plus an additional amount per child (£200 per week per child under 11 and £250 per week per child over 11).
Carers with gross receipts above this will be able to choose to have all the receipts above the threshold taxed or to calculate their ‘profit’ in the usual way for self employed people.
Because the full details of how this system will operate (will carers with gross receipts below the threshold still have to submit tax returns or not?) and those with gross receipts above the threshold may be unsure which option will be most beneficial for them, we advise that for the time being carers continue to keep receipt and/or records as usual.
We will let you know as soon as we have received the detailed legislation.
If you have had the credit in your code it will mean a reduction of your code number for 2003/2004 and your tax liability / tax deducted under PAYE for the year will increase by up to £529.
This is available from 6 April 2003 but you must apply for it. It will not be paid automatically, even if you were previously claiming Children’s Tax Credit.
It is available in respect of children up to the age of 19 at the beginning of the tax year (born after 6 April 1984) and preschool or in full time education up to NVQ Level 3 or equivalent or registered with Connexions Service.
You could receive up to £545 family element and £1,445 per eligible child. Applications will only be backdated a maximum of three months so don’t delay applying.
You may have to pay penalties if you fail to notify the Inland Revenue of increases in you income that total more than £2,500. Read the small print on the award notification.
You can now make further ISA contributions.
Maximum annual investment currently ~ Maxi ISA - £7000, Mini ISA - £3,000.
The 100% capital allowance for low emission cars (120g/km) that was introduced last year is worth considering if you are planning to change your car.
All NI rates go up by 1% from 6 April (except Class 2 – frozen at £2 per week) and income above the Class 1 and Class 4 upper threshold now becomes subject to NI at 1%.
If you receive an official looking letter or a visit from someone, saying that you need to register under the terms of the Data Protection Act and demanding a fee for this, be very wary as there are several bogus organisations using this to try to obtain money from people.
It is worth checking to see if the organisation represented appears on a list of bogus ones known to be running this type of scam, this is available on www.dataprotection.gov.uk/dpars.htm (if you cannot do this yourself contact us and we will do it for you).
Also be wary of any other organisation that does not appear on this list especially if the fee demanded is any more than £35 or where VAT is being charged.
Start getting together everything you know or think may be needed to complete your accounts and tax return. Once you have everything get it all to us. The sooner we receive it the sooner we are likely to start work on it and let you know if anything is missing.
2002/03 | 2003/04 | |
Personal Allowance (under 65) | 4,615 | 4,615 |
Personal Allowance (65 – 74) | 6,100 | 6,610 |
Personal Allowance (75 & over) | 6,370 | 6,720 |
Blind Persons Allowance | 1,480 | 1,510 |
Married Couples Allowance (under 75 & DOB before 6/4/35) | 5,465 | 5,565 |
Married Couples Allowance (75 & over) | 5,535 | 5,635 |
Married Couples Allowance (minimum amount) | 2,110 | 2,150 |
Age Income Limit | 17,900 | 18,300 |
Capital Gains Tax Annual Exemption | 7,700 | To be announced |
If you have queries about any of the above (or any other matter) please do not hesitate to contact the office on 01743 363202.
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