My Budget Report
If you didn’t watch the budget, I don’t blame you. It takes a certain type of person to get interested in politics.
There were a number of changes, that I believe will affect you, as an interpreter.
Here is my run down of the most important points.
VAT Threshold – The VAT registration threshold has now been raised to £90,000 from £85,000. This is definitely progress, and although it affects very few interpreters, it will certainly help some. I will still continue my fight to get Interpreting as a VAT exempt service. I have had a few updates on this, however it is never the answer we want, and it appears to be a much deeper issue than first imagined. I will keep you posted on this.
Top rate of Capital Gains Tax for rental properties – The top rate of 28% of Capital Gains Tax when selling a rental property has been taken down to 24%. So if you have an investment property and you were thinking of selling, there could be some tax savings here. We do deal with CGT returns, and if you sell an investment property, don’t forget that you should be declaring and paying any tax 60 days after the sale has completed.
Child Benefit – If you claim child benefit and have started to earn above £50k, you will notice that you will have to pay some or all of it back. This means if one parent in the household earned £60k, you would pay the whole amount back. However, if you had two parents earning £49k each, you would pay none of it back. By April 26, the government hope to make this household based, which is a much fairer system, but as that is a ways off, from April 24, the rate at which you start paying it back is £60,000. So if you have opted out for earning above £50k, you may want to opt back in!
National Insurance – Self employed people will get a further 2% cut in their National Insurance. This means that if you earned £30,000 profit, you will save a few hundred per year in reduced NI. From a practical point of view, this change could make a slight difference if you are considering changing to a limited company. Although broadly if your profit is around the £30-£40k range, the conversation around going limited should still happen, for less than this, the reduction in NI could make the gulf in difference much shallower.
As always, I am here for a conversation about the above and how these taxes could affect you personally, so please do not hesitate to contact me. andy@interpretingtax.com
All the best.
Andy