New State Retirement Pension Rates

Details of the new State pension rates were announced by George Osborne in the recent Autumn statement.

From April 2016, the rates will be as follows:

  • £119.30 per week for existing pensioners (i.e. those who reach state pension age before 6 April 2016)
  • £155.65 per week for the new ‘single tier’ state pension for those who reach state pension age on or after 6th April 2016, and have the full 35 years of National Insurance contributions. The actual amount payable could be higher or lower, depending on your National Insurance record.

If you are aged 55 or over, you can apply for a forecast of the amount of State pension you are likely to receive here.

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Company Cars: Tax Increase!

From 6th April 2015, all company cars are liable to benefit in kind charges, including electric cars.

Zero-emission cars now incur a benefit of 5% of their list price, whilst low emission cars (those between 51-75g/km) give rise to a benefit of 9%, an increase of 4% from last year.

All other company cars have seen an increase in the taxable benefit of up to 2%, with the maximum rate being 37% of the list price.

Although this maximum rate is set to stay at 37%, more cars will be brought into that band over the next four years – currently it applies to cars with emissions of 210g/km and above, but by 2019-20 it will include cars with emissions of 165g/km and above.

Income Structure 2015-16

If you are a Director and majority shareholder of your own company, you get the privilege of deciding how much to pay yourself as salary!

But before you go taking every penny you can carry, remember that as long as the company is making a profit, you can also vote dividends, which can be far more tax efficient.

So how much do you pay yourself?

Well if you were born after 5th April 1948, your personal allowance (the amount you can earn free of tax) for 2015/16 should be £10,600, and providing you have no other income, that could be the optimal amount to pay yourself.

Assuming that you have no other taxable income, there will be no tax to pay on this level of salary, although there will be some liability for both Employee’s and Employer’s National Insurance.

However, the company should be entitled to an Employment Allowance of £2,000 for 2015/16 to offset against any Employer’s NI liability, on both your own, and any employees’ salaries.

Please remember that as individual circumstances differ, it is always worth seeking professional advice to determine the most tax efficient remuneration method for you