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RISHI TO THE RESCUE

TODAY’S BLOG

RISHI TO THE RESCUE

Well – I, perhaps like you have just watched Friday (20th March 2020) evening’s PM announcement. It included a huge set of commitments and financial stimulus from the Chancellor Rishi Sunak. I’m just going to leave it here, with a slight lump in my throat, that this is fantastic news. Compassion and help. The enormity of his financial package will eb scrutinised and assessed, but the point is bluntly – a shot of confidence, we are in this mess together and we will help each other out of it.

There is fantastic news for employers, with a scheme to pay 80% of salary up to £2,500 a month. That is a huge commitment. July 31st self-employed tax payment can be deferred until January 2021 and VAT is also deferred by 3 months. This is not saying that taxes will not be paid but giving a very direct and real injection of cash into the system to protect each one of us.

The detail we will turn to, but for now, I’m going down the path of the optimist and if my hunch is right, Rishi has just scored a hat trick in the world cup final… well the equivalent. I hope you agree that this is good news. We rise together.

RISHI TO THE RESCUE

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

Email – info@solomonsifa.co.uk 
Call – 020 8542 8084

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Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

Email – info@solomonsifa.co.uk    Call – 020 8542 8084

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RISHI TO THE RESCUE2023-12-01T12:13:20+00:00

THE BUDGET 11 MARCH 2020

TODAY’S BLOG

THE BUDGET 11 MARCH 2020

In order to save you time, I watched the Budget and even had a neat little animated logo designed for the occasion. Prior to the Budget I had hopes of some significant pension reforms – to simplify pensions whilst also hoping for the possibility of a fairer tax system, which means different things to different people – I would probably settle for a more straight-forward one.

In fairness to Rishi Sunak, becoming Chancellor when he did must have felt rather like a “hospital pass”. By which I mean a term used in rugby, where you are passed the ball so that you are the last one to face some enormous opponent who will surely flatten you and send you to hospital for treatment.

As he prepared for his Budget, we were all aware of the gathering momentum of “coronavirus” and the global collapse of the stock markets as investors seem unable to comprehend the impact on trade and the current oil price war between Russia and Saudi Arabia. No small matters and certainly sufficient to cause significant “alarm”.

The Budget

INCOME TAX

Rates remained unchanged – so depending on whether you are a glass half empty or half full, if you allow for inflation, that’s worse, but better than an increase.

  • Personal Allowance: £12,500
  • Basic rate (20%) on the next £37,500
  • Higher rate (40%) on income up to £150,000 (but loss of personal allowance at £100,000 ars previously)
  • Additional rate (45%) on income over £150,000

The only allowance to improve marginally was Capital Gains tax (increased from £12,000 to £12,300), which will be of little comfort today.

PENSIONS

The Lifetime Allowance has increased by inflation to £1,073,100. The precision of this number speaks volumes of the Treasury’s desire to collect every penny.

Anyone earning over £300,000 can only contribute £4,000 to a pension (including employer payments). Otherwise, some relief for Hospital Consultants as the Tapered Annual Allowance was inflated by £90,000 to impact those with incomes over £240,000. This keeps tax calculations complex and required, but likely to kill off public sympathy for the cause to simply abolish the Tapered Annual Allowance. If you really don’t understand this, it probably doesn’t impact you.

ISAs

There remain at a very healthy £20,000 of tax-free growth and tax-free income when withdrawn, unlike a pension which has tax relief and provides taxable income. This also tells you something about the Treasury.

A Junior ISA (JISA) has been greatly increased to allow for a significant £9,000 into a JISA each tax year from 2020/21. No real benefit for adults, but of course a bit of a nod to those funding University. Though this could turn into a large fund over time and some thought ought to be given to how most 18 year-olds handle money.

INHERITANCE TAX

No changes

BUSINESS OWNERS

Those wishing to sell a business that they built will now have much higher taxes to pay on sale as entrepreneurs’ relief was slashed. The 10% tax rate on sale of a business still applies but only on the first £1m rather than the first £10m. That idea that your business is your pension… well, think again the new allowance is lower than the Lifetime Allowance.

CORONAVIRUS – CORVID19

Various special measures have been “initiated” to enable people to have some form of basic minimum income (statutory sick pay) from first signs of illness and self-isolation. This is an attempt to head off concerns that those needing to earn cannot afford to be ill and therefore continue to pose a “threat” to the rest of us. Whether it works remains to be seen – I suspect call centres will be jammed for some time.

As far as I can tell today, a few things are in short supply and probably more expensive than a week ago – toilet paper, hand sanitiser and wisdom.

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

Email – info@solomonsifa.co.uk 
Call – 020 8542 8084

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Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

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THE BUDGET 11 MARCH 20202023-12-01T12:13:22+00:00

HOW TO PROTECT YOUR TAX ALLOWANCES

TODAY’S BLOG

HOW TO PROTECT YOUR TAX ALLOWANCES

The government has committed to an awful lot of new spending. But the money has to come from somewhere. The unwritten rule of electioneering is to announce the spending increases during campaigning, and wait for the first post-election Budget to reveal the bad news about tax. Over the past few weeks we’ve seen suggestions of everything from some form of ‘mansion tax’ on more expensive homes, to changes in capital gains tax and tweaks in pension tax relief.

Sajid Javid’s resignation as chancellor – the person in charge of the Budget – might have derailed some of the plans in progress, but commentators are divided on what’s likely to happen next. Some think fiscal (tax) rules will be relaxed, so there’s less pressure to balance the books and spending can rise alongside tax cuts.

TAX ALLOWANCES

Let us not forget the small matter of an election manifesto pledge to get rid of ‘arbitrary tax advantages’ for the wealthy. Unfortunately we don’t have a working crystal ball to know what tax changes if any will come to fruition. We think the best way to shelter yourself from any potential tax changes is to take as much advantage as you can with the appropriate current breaks, while they still last:

  • Take advantage of ISAs (£20,000)
  • Consider a Lifetime ISA (£4,000)
  • Don’t forget Junior ISAs (£4,368)
  • Top up your pension (£40,000 and the abilty to use up unused allowances from the 3 previous tax years)
  • Consider salary sacrifice (employer pays your reduced NI and tax into your pension)
  • Take advantage of your spousal exemptions (share capital gains etc)
  • Claim the marriage allowance (transfer £1,250 to your spouse)
  • Consider your annual gifting allowance of £3,000
  • Use your 2019/20 Capital Gains Tax Allowance of £12,000
  • VCT, EIS, SEIS investment options for those that are more adventurous

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

Email – info@solomonsifa.co.uk 
Call – 020 8542 8084

7 QUESTIONS, NO WAFFLE

Are we a good fit for you?

Take Survey

PRIVACY POLICY  |  DATA PROTECTION

GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

Email – info@solomonsifa.co.uk    Call – 020 8542 8084

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HOW TO PROTECT YOUR TAX ALLOWANCES2023-12-01T12:13:23+00:00

TAX YEAR END PLANNING PART 3

TODAY’S BLOG

TAX YEAR END PLANNING PART 3 – IHT

Inheritance Tax is one of the most unpopular taxes, yet it is a tax that you will not pay – your estate might. There are various solutions to reducing or avoiding inheritance tax – talk to me if you want to know more about them. However, each tax year you get some basic allowances that you can use to pass on wealth without any inheritance tax.

  • ANNUAL EXEMPTION

Each tax year you can give away £3,000 free of IHT. If you do not use all of the exemption in one year, you can carry forward the unused element, but only to the following tax year, when it can only be used after that year’s exemption has been exhausted.

  • SMALL GIFTS EXEMPTION

You can give up to £250 outright per tax year free of IHT to as many people as you wish, so long as they do not receive any part of the £3,000 exemption.

  • NORMAL EXPENDITURE EXEMPTION

The normal expenditure exemption is potentially the most valuable of the yearly IHT exemptions and the one most likely to be reformed. Currently, any gift is exempt from IHT provided that:

    • you make it regularly;
    • it is made out of income (including ISA income); and
    • it does not reduce your standard of living.

One way to combine the use of your CGT annual exemption with IHT planning could be to make an outright lifetime gift of investments. Such gifts would count as a disposal for CGT purposes and a potentially exempt transfer for IHT. The recipients of the gifts would start with a base cost for the investment equal to the gift’s value and there would be no IHT to pay at any time, provided you survived for the following seven years (possibly reduced to five under OTS proposals).

ANNUAL GIVING

ISAs – INDIVIDUAL SAVINGS ACCOUNTS

There are five important tax benefits which are common across the different types of ISA:

·         Interest earned on cash or fixed interest securities is free of UK income tax.

·         Dividends are free of UK income tax.

·         Capital gains are free of UK CGT.

·         There is nothing to report on your tax return.

·         On death, the income tax and CGT benefits of your ISAs can effectively be transferred to a surviving spouse or civil partner.

The overall maximum that can be invested in all ISAs in 2019/20 is generally £20,000 (£4,368 for Junior ISAs). There are no carry forward provisions, so like the CGT annual exemption it is a case of use it or lose it.

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

Email – info@solomonsifa.co.uk 
Call – 020 8542 8084

7 QUESTIONS, NO WAFFLE

Are we a good fit for you?

Take Survey

PRIVACY POLICY  |  DATA PROTECTION

GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

Email – info@solomonsifa.co.uk    Call – 020 8542 8084

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PRIVACY POLICY  |  DATA PROTECTION

TAX YEAR END PLANNING PART 32023-12-01T12:13:23+00:00

TAX YEAR END PLANNING PART 2

TODAY’S BLOG

TAX YEAR END PLANNING PART 2 – CAPITAL GAINS

2019 was a good year for nearly all investors in share or bond-based funds. Even the Brexit-buffeted UK stock market, something of laggard in global terms, grew by over 14%. If your portfolio does not show some decent capital gains for the year, it is probably in need of a serious review.

As a general rule, it makes sense to realise gains up to the Capital Gains Tax (CGT) annual exempt amount each tax year. The exemption, covering £12,000 of gains in 2019/20, cannot be carried forward: use it by 3 April (the tax year ends on Sunday 5 April), or you lose it. Systematically using the exemption can help avoid building up large gains over the years which attract tax. Currently, the maximum tax rate on gains is 20% for higher and additional rate taxpayers (28% for gains involving residential property and carried interest).

If you want to crystallise gains to use your exemption, but would prefer to retain the same investments, you cannot simply sell them one day and buy them back the next. Anti-avoidance rules prevent this from being effective, but there are alternatives that achieve a similar result, such as reinvesting in an ISA or self-invested personal pension.

CAPITAL GAIN

CAPITAL GAINS TAX IN PRACTICE

CGT applies to nearly all forms of investment, the notable exceptions being ISAs, Pensions and Investment Bonds. In simple terms, you want to trigger gains by selling an asset that has increased in value. Ideally you want to trigger as close to the allowance (£12,000) as possible. Thats a gain. So by way of example, if you invested £10,000 in 2010 and the investment is now worth £22,000 you would need to sell the entire investment to trigger a gain of £12,000.

The important issue is to know when you invested and how much. This is often more complicated than it appears because funds or holdings may well generate income which might have been paid to you, but may well have been re-invested. Over time the sums get very complicated.

We do a lot of work for clients that have a portfolio that we gradually convert into ISAs. Each year we trigger gains to move over into your ISA, ideally until the taxable investment has nothing left as it has all been moved into a tax-free ISA pot. This is a good way to gradually convert a portfolio into a tax-free portfolio.

A married couple have their own allowance each, but this is only relevant if the investment is jointly owned. Trusts also have a CGT allowance, but only at half the rate of the personal allowance (£6,000 in 2019/20).

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

Email – info@solomonsifa.co.uk 
Call – 020 8542 8084

7 QUESTIONS, NO WAFFLE

Are we a good fit for you?

Take Survey

PRIVACY POLICY  |  DATA PROTECTION

GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

Email – info@solomonsifa.co.uk    Call – 020 8542 8084

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PRIVACY POLICY  |  DATA PROTECTION

TAX YEAR END PLANNING PART 22023-12-01T12:13:24+00:00

TAX YEAR END PLANNING PART 1

TODAY’S BLOG

TAX YEAR END PLANNING PART 1

As you will have gathered, the Chancellor Sajid Javid resigned on 13 February just a month before his first Budget. There will be many that offer reasons for this, perhaps some of them will be something resembling the truth, but as they say “a week in politics is a long time”. We have a new Chancellor – Rishi Sunak (who?) … who sent most of us into a google spin. He’s the 39 year-old who worked for Goldman Sachs immediately following graduating from Oxford in 2001, who he left in 2004 to become a Hedge Fund 2006-2010. He became an MP in 2015 taking over William Hague’s seat in Richmond, Yorkshire.

As a result of the rather sudden changes in arguably the most important job in UK politics, there was concern that the Budget may have to be resceduled. However we have been reassured that 11 March remains the date for the 2020 Budget date. We also have an effective deadline for tax-year-end planning. There could be a range of measures announced on 11 March (normally operative from the beginning of Budget day) which could impact on such planning. The Government has loosened the purse strings on capital investment, but in terms of day-to-day spending it has little room for manoeuvre. The Treasury may thus be tempted to make some subtle tax changes to boost its coffers.

Rishi Sunak - UK Chancellor

PENSIONS

More than in most years, 2020 is the year to ensure you make your pension contributions before the Chancellor delivers his speech. As explained earlier, the risk of a major pension tax reform, potentially reducing higher rate tax relief, is greater now than for some while.

One important point to check is whether you have any unused annual allowance from 2016/17, when the maximum annual allowance (before tapering) was £40,000. You have until the end of 2019/20 to use up this past allowance, or it is lost forever. However, it can only be utilised once your full annual allowance for the current tax year is exhausted. So, for example, if you are not affected by the taper rules and you have £10,000 annual allowance unused from 2016/17, to mop it up completely would require a total contribution of £50,000 in 2019/20 – £40,000 for the current tax year and £10,000 carried back three years.

Unused relief can also be used from later years, but once you have paid the current year ‘entrance fee’, the excess contribution is offset in chronological order, starting with 2016/17. Under current rules unused relief can be carried forward for three tax years (hence the 2016/17 deadline), but that principle – and the rate of tax relief – could change.

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

Email – info@solomonsifa.co.uk 
Call – 020 8542 8084

7 QUESTIONS, NO WAFFLE

Are we a good fit for you?

Take Survey

PRIVACY POLICY  |  DATA PROTECTION

GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

Email – info@solomonsifa.co.uk    Call – 020 8542 8084

7 QUESTIONS, NO WAFFLE

Are we a good fit for you?

Take Survey

PRIVACY POLICY  |  DATA PROTECTION

TAX YEAR END PLANNING PART 12023-12-01T12:13:24+00:00

ONE MONTH UNTIL BUDGET DAY

TODAY’S BLOG

ONE MONTH UNTIL BUDGET DAY

The chancellor Sajid Javid announced the date of next UK budget, with a pledge to tackle the cost of living and tear up strict budget rules to hike borrowing for infrastructure spending. The 2020 budget will take place in a month’s time on 11 March 2020 after a planned budget last November was cancelled in the run-up to the election.

Business leaders have said it was the new administration’s “first opportunity” to show it understood firms’ concerns amid continued political uncertainty over Brexit. Javid said the British public had “told us they want change,” in a signal of the government’s changing priorities since the Conservatives’ landslide election victory in December. Officials said Javid would use the budget to:

  • Fulfil government pledges on tax to “help tackle the cost of living for hard-working people.”
  • “Level up” across the country through “billions” in investment, rewriting previous administration’s spending rules and taking advantage of low interest rates to increase borrowing.
  • “Build on” recent announcements to boost spending on public services and tackle the cost of living, including hospital investment, vocational training and a significant hike in the minimum wage

So…. we shall have to wait 4 weeks to see what happens and whether mistakes of the past will be repeated. I have every confidence that they will be.

HOUSES OF PARLIAMENT

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

Email – info@solomonsifa.co.uk 
Call – 020 8542 8084

7 QUESTIONS, NO WAFFLE

Are we a good fit for you?

Take Survey

PRIVACY POLICY  |  DATA PROTECTION

GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

Email – info@solomonsifa.co.uk    Call – 020 8542 8084

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ONE MONTH UNTIL BUDGET DAY2023-12-01T12:13:24+00:00

COMPANY CAR? GEAR UP FOR CHANGE…

TODAY’S BLOG

COMPANY CAR? GEAR UP FOR CHANGE..

Do you drive a company car? do you know your NDEC from your WLTP? You now need to.

Emissions, emissions…

For many years, company car tax scales have been based on CO2 emission levels, with a supplement (currently 4%) for most diesels (although a handful of new diesels now escape this surcharge). The emissions were measured under the New European Driving Cycle (NDEC) test, which produced results increasingly at variance with the real world.

In response, a new testing regime has been developed, the World harmonised Light vehicles Test Procedure (WLTP). Unsurprisingly, this test reveals much higher emission levels than the NDEC – about 15%-20% more, with the greatest increase for cars with the smallest engines.

Company car changes

For company cars registered from 6 April 2020, the WLTP CO2 emission figure will be used in determining company car tax rates. However, for cars registered before that date, the old NDEC measure will continue to apply. As a result, from 2020/21 onwards there will be two sets of company car scales, one WLTP scale for cars registered on or after 6 April 2020 and the other NDEC-based scale for older cars. For any given level of emissions, in 2020/21 the WLTP percentage charge is 2% lower than the NDEC charge, although this difference will be phased out over the following two tax years.

Electric and Hybrid Cars

6 April 2020 will also see a change to the tax treatment of electric and hybrid cars. The charge for all pure electric cars will drop to zero – good news for Tesla – while for hybrid cars with CO2 emissions of 1-50g/km, the scale charge will be based on the vehicle’s electric-only range. For hybrids there will be separate NDEC and WLTP scales, with both offering no discount if the hybrid cannot run at least 30 miles on battery power alone.

Action

The company car tax regime has become much stricter over the years and there is some evidence that more employees are choosing cash rather than car where they have the option. You may want to join them.

If you are due to change your company car soon, make sure you understand the tax consequences of any choice you make. If you are thinking about an electric car and the required charging points at your home or office, the Pod Point website is worth having a look at. They also have a guide that gets fairly regularly updated on different types of electric cars. I haven’t used Pod Point and am not endorsing them (or paid by them) but you may find their information helpful.

Of course if you wish to see the Tesla range….

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

Email – info@solomonsifa.co.uk 
Call – 020 8542 8084

7 QUESTIONS, NO WAFFLE

Are we a good fit for you?

Take Survey

PRIVACY POLICY  |  DATA PROTECTION

GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

Email – info@solomonsifa.co.uk    Call – 020 8542 8084

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COMPANY CAR? GEAR UP FOR CHANGE…2023-12-01T12:13:25+00:00

CHANGES FOR TRUSTEES

TODAY’S BLOG

CHANGES FOR TRUSTEES

A series of government moves over the past few decades have reduced their tax advantages and made trusts much less attractive to wealthy families. They are likely to become less popular still from March, when a new requirement will force thousands more trustees to list on a government register that is partially open to the public, or risk penalties.

Since 2017, certain types of trusts have had to report information to a government online register called the Trusts Registration Service (TRS). This came into being as result of an EU-wide directive to tackle money laundering. Far be it from me to imply or suggest that motivation for Brexit had anything to do with circumventing new EU Anti-money laundering rules!

To comply with the rules, all UK trusts that have to pay a tax liability such as capital gains tax (CGT), income tax, inheritance tax or stamp duty must report information to the register.

Trusts that are outside the UK but trigger UK tax must also do so, as must all trusts that are required to fill out a self-assessment tax return anyway. Currently the register is not publicly available, with access limited to law enforcement authorities. But from March 2020, the next phase of the EU directive (the fifth Anti Money-Laundering Directive) is set to increase the number of trusts that must submit reports.

It will also partially open up the register to the public, including journalists, leading some to worry about an erosion of privacy. Despite the UK’s imminent departure from the EU, the government is committed to implementing the directive and passing it into domestic law. Tax experts warn that hundreds of thousands of trustees and beneficiaries could be affected and need to understand better the possible impact of the changes.

TRUSTS & MONEY LAUNDERING

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

Email – info@solomonsifa.co.uk 
Call – 020 8542 8084

7 QUESTIONS, NO WAFFLE

Are we a good fit for you?

Take Survey

PRIVACY POLICY  |  DATA PROTECTION

GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

Email – info@solomonsifa.co.uk    Call – 020 8542 8084

7 QUESTIONS, NO WAFFLE

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CHANGES FOR TRUSTEES2023-12-01T12:16:59+00:00

PPI – ANOTHER PAYOUT?

TODAY’S BLOG

PPI – ANOTHER PAYOUT?

Just when you thought you had seen the last of PPI, I am here to tell you that it’s not over until the tax taken is repaid… If you’re one of the millions of people who’ve shared in the £34billion of PPI repaid (so far), you may have paid tax unnecessarily. If so, and your payout happened in the last four tax years, you are due money back. The money you get paid back for PPI can have up to three main elements:

  • A refund of the PPI you paid.
  • If the bank (outrageously) added an extra loan to your original loan just to pay for the PPI you get back any interest you were charged on this extra loan.
  • You get Statutory Interest (at eight per cent a year) on the total of both those sums, for each year since you got the PPI.

Only the third element is taxable. Any tax taken is usually shown on your payout statement. Tax is due because this Statutory Interest is designed to return you to the position you’d have been in if you hadn’t had PPI. If tax is due on PPI payouts, most firms deduct it automatically, at 20 per cent, before you get the money. That has always been an issue for non-taxpayers. However, since April 6, 2016, far more people have been owed tax back, as that’s when the personal savings allowance launched. It allows most taxpayers to earn £1,000 a year of savings interest, tax-free. Since then, while most savings interest has been paid without any tax taken off, PPI still has 20 per cent automatically deducted. Therefore, oversimplifying somewhat, it counts as savings interest, as if you’d earned it on that saved cash.

PPI AGAIN

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

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GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

Email – info@solomonsifa.co.uk    Call – 020 8542 8084

7 QUESTIONS, NO WAFFLE

Are we a good fit for you?

Take Survey

PRIVACY POLICY  |  DATA PROTECTION

PPI – ANOTHER PAYOUT?2023-12-01T12:17:00+00:00

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