This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our Cookie Policy.
Analytics

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.

Essential

Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Where Taxpayers and Advisers Meet
Teachers: How Will The 2015 Tax System Changes Affect You?
06/05/2015, by Tax Rebate Services, Tax Articles - Income Tax
4548 views
0
Rate:
Rating: 0/5 from 0 people

The financial year runs from April to April and in 2015 the government are implementing some changes that will affect most taxpayers.

The theory is to reward work by supporting those with middle and lower incomes. Most teachers fall into the former category, so we thought it was important for you to have an overview of the main changes.

Changes that Affect Most Taxpayers

  • Personal Allowance is being raised from £10,000 to £10,600. If you were born after 5th April 1948 you can earn £10,600 before you need to pay any tax at all – that’s £600 more than last year. If you are over 75-years-old your allowance is £10,660.
  • Once you have used up your Personal Allowance, the point up to which you pay the basic rate of tax has been reduced from £31,865 to £31,785.
  • The standard tax code for 2015-16 is 1060L.
  • You will need to earn £42,385 before you need to pay the higher rate of tax at 40%. This was £41,865 last tax year.
  • Income tax bands are slightly different.

20% Basic rate payable on taxable income £0-£31,785

40% Higher rate payable on taxable income £31,786-£150,000

45% Additional rate payable on taxable income over £150,000.

 

So, to work out how much income tax you will pay, you need to deduct your Personal Allowance from your salary amount

For example:

£35,000 (income) - £10,600 (Personal Allowance) = £24,400.

So you will pay the basic rate of tax of 20% on that £24,400.

Changes that will Affect Some Taxpayers

Savers

  • New starting rate for taxing savings income is 0%! This is a massive difference as it was 10%. It applies to savings that total £5,000 and means that tax-free interest can be paid directly to your account.
  • Junior ISAs and Child Trust Funds have annual subscription limits increased to £4,080.
  • Cash ISAs and Stock and Shares ISAs have been harmonised at £15,240 across both. It is now easier to transfer money between these two types of accounts.
  • Predictions are that there will soon be even more types of investments allowed in ISAs.

Tax Rebates 

There are thousands of British teachers who are essentially overpaying their tax because they do not reclaim tax relief on their work-related costs. This isn’t just for the new tax year, with the tax office allowing you to reclaim for up to the last four tax years.

The most common reasons for teachers being eligible for tax relief are;

  • Buying and washing specialist clothing – an example is P.E. kit
  • Mileage on journeys you make between work places in your own car. Going to CPD conferences, meetings, visiting other schools in your cluster…the list is quite long when you think about it!
  • Use of home for work. Yes, you all do it and the rules are complicated, but you could have some legitimate claims here.
  • Subscriptions to professional bodies and Union fees e.g. the NUT.

Not everyone will benefit from the new 2015 changes and remember, HM Revenue & Customs (HMRC) put the onus on you to make sure your tax affairs are right. So it’s always best to check your own position each year

Click here for more information on Teacher Tax Rebates.

About The Author

This article was provided by Tony Shanks, Operations Director of TaxRebateServices.co.uk, leading experts in reclaiming tax and completing tax returns in the UK.
Back to Tax Articles
Comments

Please register or log in to add comments.

There are not comments added

ICPA Chairman Tony Margaritelli discusses 3 topics centred around October, including: 1. HMRC Furlough Fraud & Fighting For Your Clients, 2. Think About Yourself, 3. Are You a HMRC Customer.