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Autumn Statement - Income Tax and National Insurance

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3 December 2014
Income tax rates
 
The personal allowance is to be increased by £100 to £10,600 from April 2015.  The higher rate tax threshold will also increase to £42,385 from next year. The national insurance upper earnings and upper profits limit will increase to the same level.
 
Employer’s NI for apprentices
 
Employer’s National Insurance contributions for apprentices whose age is under 25 will be abolished up to the upper earnings limit with effect from April 2016.

Taxation of UK resident non-domiciliaries
 
Non domiciled individuals resident in the UK can choose to be taxed on the remittance basis i.e on income and/or gains brought in to the UK rather than on an arising basis i.e worldwide income and/or gains. Long term residents have to pay the Remittance Basis Charge (RBC) if they wish to be taxed on the remittance basis.
 
Currently the RBC is £30,000 for those who have been resident in the UK for 7 out of 9 years and £50,000 for those who have been resident in the UK for 12 out of 14 years. Going forward the £30,000 RBC remains unchanged but the charge increases to £60,000 for those in the UK for 12 out of 14 years. Furthermore, a new £90,000 RBC will be introduced for those that have been resident for 17 out of 20 years.
 
Currently taxpayers can elect to be taxed on the remittance basis annually. The Government will consult on making the election apply for a minimum of three years.
 
Personal allowances for non residents
 
The Government has been consulting on restricting the personal allowance for non residents, with the original intention to implement any changes from 6 April 2015. Due to the number of people affected by the changes the consultation is to continue with any changes not coming in before April 2017.

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