6th January 2016 at 4:15pm
It’s January 2016 and many of us will now be looking at the year ahead and what’s in store. And what better way to do it than getting some key dates into that diary or calendar you received in your Christmas stocking!
There are always loads of things to remember, such as birthdays, school holidays, dental appointments, celebrations – even when the car next needs taxed (now we’ve lost the tax disc off the front as reminder). And it’s great to be able to get things pencilled in and our personal lives organised – but what about our financial lives?
There are a lot of things happening over 2016 that could impact our day to day finances too, so it’s well worth having these planned in also.
Dates for the diary
We thought it might be handy to give you some key dates to watch out for over the next year, and here is our rundown of some of the most important things to mark off on your calendars…
Tax returns go digital. New digital “personal tax accounts” will be introduced in 2016. It’s expected that everyone who currently fills out a “self-assessment” tax return will be using the digitised system by 2020.
Under these plans, everyone’s digital account will hold details captured from other sources including income from employment and interest earned on savings, which from next year will also be passed to HMRC by banks and building societies.
- The deadline for online submission of 2014/15 self-assessment tax returns to HMRC. Unless you’ve sent the return by 30 December 2015 – if you want HMRC to collect your 2014/15 tax liability via the future years PAYE tax code, designed to spread the liability over a 12 month period, you’ll be expected to make an immediate payment. Remember too that fines apply for late payment/submission, so don’t leave it till the last minute.
- It is also the date of the first payment on account due for the 2015/16 tax year if you do self-assessment.
Chancellor George Osborne’s Budget speech.
An increase in stamp duty for landlords.
If this applies to you as you’re buying a second home or buy-to-let property, you’ll need to pay an extra 3% in stamp duty on the entire price, and that’s on top of the rates residential buyers pay.
Last day of the 2015/16 tax year. It’s also the deadline for claiming a PAYE tax refund for the 2011/12 tax year and any tax overpaid under self-assessment for 2010/11, and making payments into your ISA and/or pension against the current year’s allowances.
A raft of changes announced previously – affecting pensions and savings– come into effect:
- New ‘flat rate’ state pension of £155.65 comes into effect for those reaching state pension age from this date.
- Personal savings allowance is introduced. This is set at £1,000 for basic-rate taxpayers and £500 for higher-rate taxpayers. This means they can earn that much in interest before tax is due. The allowance is £0 for additional-rate taxpayers.
- Reduction in lifetime allowance to £1m.
- Reduced annual allowance for those people with ‘adjusted annual incomes’ of over £150k.
- Complete removal of contracting out from the state pension scheme that will mean an increase in National Insurance to the normal rates for many.
- New rules for flexible ISAs become effective, allowing investors to withdraw cash and replace it in the same tax year without impacting their annual ISA allowance.
- Pension input periods to align with tax years.
- New dividend taxation regime begins. Everyone will be able to earn £5,000 of dividend income without paying any tax. Dividend income in excess of the allowance will be taxed at 7.5%, 32.5% or 38.1%, as appropriate.
- Scottish Rate of Income tax comes in for Scottish taxpayers, although initially it means no change to the overall tax rate.
Scottish parliamentary election. The public will elect 129 members to the Scottish Parliament. It will be the fifth election in Scotland since the devolved parliament was established in 1999.
Although there are no specific financial events happening this month, it is likely to be the month where you are making your final payment against your summer holiday and, for some families, starting to think about the upcoming university term for children leaving school. What plans have you made to finance them through these important years?
- By 31 July, the second payment on account for the 2015/16 tax year is due to HMRC by anyone using self-assessment.
- 31 July is also the deadline to renew your tax credits – if you don’t complete your renewal pack and return it by this date, your tax credits will stop.
It’s back to school time – remember to budget in for those added extra’s. Many of their out of school activities will kick off again and they can be pricey.
- The university term starts. If you’ve children this is always an expensive time and well worth planning ahead for.
- For Scottish taxpayers this is usually the month when the Scottish Finance Minister, currently John Swinney, delivers the Scottish budget, setting out government spending for the next tax year.
Again there’s no specific events planned for this month however it’s the school autumn break – another time that can hit the wallet hard and worth planning for.
This is generally the time of year when we can expect the Chancellor, George Osborne, to deliver the autumn statement and set the scene for the 2017/18 tax year.
Christmas – whilst we are still at the start of the year why not make a new year’s resolution now not to leave it to the last minute and plan your Christmas preparations so they are spread over the year. This avoids the last minute panic when there’s a danger of spending more money than you should, just because you need to buy something.
Keeping you posted
It’s certainly going to be a busy year, with April being an especially bumper package this year. As always, we’ll be here all year round keeping you up to date on what’s happening, providing expert comment and some savvy support.
Have a fantastic 2016!
The information in this blog or any response to comments should not be regarded as financial advice. Laws and tax rules may change in the future. The information here is based on our understanding in January 2016. Your personal circumstances also have an impact on tax treatment.