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Individuals - Personal Taxes, Tax Credits, Child Benefits

The main announcements for all individuals - personal taxes, tax credits, child benefits, are shown below. More details can be found in the Overview of Tax Legislation and Rates (OOTLAR) (PDF 1.3MB) document.

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Main announcements

1. Income tax personal allowances for 2014-15

The personal allowance for people born after 5 April 1948 will be increased to £10,000 in 2014-15. As set out in Budget 2011, once the personal allowance has reached £10,000, it will then increase in line with inflation (based on CPI) in future years, starting from 2015-16. As announced in Autumn Statement 2012, the higher rate threshold, which equals the sum of the personal allowance and the basic rate limit, will be increased by 1 per cent to £41,865 in 2014-15. Therefore the basic rate limit will be set at £31,865 in 2014-15.

Income tax personal allowances for 2014-15 (PDF 52K)

The rates and allowances for 2013-14 are unchanged from the amounts announced at Autumn Statement. These are reproduced in the rate tables in Overview of Tax Legislation and Rates document.

2. New Childcare Scheme from Autumn 2015

A new childcare scheme will be introduced to support working families with their childcare costs.

For childcare costs of up to £6,000 per year per child, support of 20% will be available worth up to £1,200. From the first year of operation, all children under 5 will be eligible and the scheme will build up over time to include children under 12.

The scheme will provide support for families where all parents are in work and not receiving support through the Childcare Element of Working Tax Credits/Universal Credit, or where one has an income over £150,000. Support will be provided through a childcare account redeemable at any registered childcare provider.

The new scheme offer will be phased in from Autumn 2015 as the current system of Employer Supported Childcare is phased out. The Government will shortly consult on the detail of delivery.

3. Exemption threshold for employer provided beneficial loans

The threshold for employment-related taxable cheap loans to be treated as earnings of the employment,will increase from the current threshold of £5,000 to £10,000 for  2014-15 and subsequent tax years. As long as the total outstanding balances on all such loans do not exceed the threshold at any time in a tax year, there is no tax charge.

Exemption threshold for employer provided beneficial loans (PDF 40K)

4. Collection of debts through PAYE tax codes

Later this year the Government will consult on improving its collection of tax debts through the PAYE coding out system, to make the process fairer and more equitable. This will include increasing the size of debts that can be recovered through coding out from those with higher incomes.

5. Seed Enterprise Investment Scheme - Reinvestment Relief and Income Tax Relief

Legislation will be introduced in Finance Bill 2013 to extend the capital gains tax (CGT) relief for reinvesting gains in SEIS shares to gains accruing in 2013-14 when those gains are reinvested during 2013-14 or 2014-15 the relief will apply to half the qualifying re-invested amount.

Reinvestment Relief (PDF 77K)

Legislation will also be introduced to prevent a company from being disqualified from SEIS where it was established by a corporate formation agent before sale to its ultimate owners. This will apply in respect of shares issued on or after 6 April 2013.

Income Tax Relief (PDF 37K)

6. Company Car Tax and Car and van fuel benefit charge

Legislation will be in Finance Bill 2013 to introduce two new appropriate percentage bands for company cars emitting 0-50g of carbon dioxide per kilometre (with appropriate percentage set at 5 per cent) and 51-75g CO² per km (with the appropriate percentage set at 9 per cent).

Company Car Tax (PDF 50K)

The rate of fuel benefit charge for company cars, fuel benefit charge for company vans, and the benefit charge for company vans will all increase in line with inflation (based on RPI) for 2014-15. The increase will be based on the September 2013 RPI figure.

Car and van fuel benefit charge (PDF 50K)