Is it Time for an IHT Health Check?

Many of us have been thinking about taking care of our health rather a lot over recent months and now might also be a good time to give your inheritance tax position a “health check” too.

You will find some of our top tips in the article below to help you make a start.

We would be delighted to discuss your inheritance tax “health” with you in greater detail in person, please do get in touch if you would like any further information or to arrange a time to meet.

Health and Social Care Levy

National insurance contributions and dividend tax rates will increase by 1.25 percentage points across the UK from April 2022, with the projected £12bn annual income to be ringfenced to pay for health and social care.

In a move that breaks the Conservative’s manifesto pledge on raising taxes, the Prime Minister has confirmed that rates of national insurance are to be increased to pay for the impact of the coronavirus pandemic on the NHS and to address the long-standing funding gap for health and social care.

From 1 April 2022, there will be a temporary 1.25% increase in class 1 (employee) and class 4 (self-employed) national insurance contributions (NIC) paid by workers, as well as a 1.25% increase in class 1 secondary NIC paid by employers (so 2.5% in total). The 1.25% increase will also apply to class 1A and class 1B NIC paid by employers.

The increase will apply to employed (include deemed employees) and self-employed individuals and partners earning above the class 1 primary threshold / class 4 lower profits limit (currently £9,568 in 2021/22). Employers will pay the additional 1.25% for employees earning above the class 1 secondary threshold (currently £8,840 in 2021/22). Existing reliefs and allowances from employer’s secondary class 1 NIC will apply to the levy.

From April 2023, the increases will be legislated separately as a “health and social care levy” and NIC rates will return to 2021/22 levels. The levy will be hypothecated in law, meaning that the revenues will be ringfenced for health and social care. From that date, the legislation will also extend the revenue raising measure to individuals over state pension age in employment or self-employment, who are currently exempt from paying NIC.

The levy, including the temporary NIC increase in 2022, will be legislated for shortly.

Alongside the levy, which will be paid by employees, the self-employed and businesses, the government has announced a 1.25% increase in dividend tax rates from 1 April 2022, taking rates to: 8.75% for basic rate taxpayers, 33.75% for higher rate taxpayers and 39.35% for additional rate taxpayers. The £2,000 dividend allowance will remain.

The increase in dividend tax rates will be legislated for in the next Finance Bill and the government estimates that 70% of the revenue raised will be paid for by additional and higher rate taxpayers in 2022/23.

Comment from Mellor Oxland on these changes: “Although there are concerns about the new charge being paid solely by employed earners, it seems likely that in principal many taxpayers will not object to paying the levy or the increased dividend charge because from April 2023 the funds will be earmarked via legislation for the NHS and Social Care. However, owner managed businesses may consider it appropriate to accelerate payment of bonuses, or company dividends, and those who are self-employed may want to accelerate income where possible, to avoid the temporary increase in NIC and dividend tax that will apply after 5 April 2022”.

Another M70 British Record by David Oxland!

At the BMAF Track and Field Challenge – South on Sunday 1st August, British Masters Hon Treasurer David Oxland took nearly 2 seconds off a long standing M70 1500m British Record crossing the line in 5.10.62.

David, a former World Masters M60 record holder at 1500m indoors, has already broken the M70 800m British Record this year.

Cally Bamford to Become a Partner at Mellor Oxland LLP

The partners of Mellor Oxland LLP are delighted to announce that Cally Bamford will join them as a partner in September this year.

Cally joined Mellor Oxland in August 2020 as senior tax manager, having previously worked at Cooper Parry and prior to that at Grant Thornton. In common with the existing three partners, she is a Chartered Tax Adviser as well as a member of the Association of Tax Technicians. She is a graduate of Durham University.

Cally will continue to specialise in advising private clients. She commented: “Mellor Oxland is a niche tax and accounting practice and with four partners and our two fee-earning staff all holding major tax and/or accounting qualifications, I believe that we are in a fairly unique position in the East Midlands and I am naturally delighted to be joining the partnership”.

Cally is married with two children, she loves being outside and when it is too wet for walking in the countryside and digging her allotment, she enjoys playing with her children and reading.

David Oxland breaks M70 800m British Record!

David Oxland has just broken the 17 year old M70 800m British Record by a comfortable margin of over one second, bringing the record time down to 2:32.46. He achieved this at Nuneaton in their “Night of 800m PBs” which involved a graded race with young athletes averaging around one fifth of his age!

David, who is Hon Treasurer of BMAF, is a former M60 Indoor 1500m record holder as well as three times M60 World champion at distances between 3,000m and 8k (cross country). Although he won a silver medal at 800m in 2013 at the World Masters championships at Porto Alegre, he has previously regarded this distance as a bit on the short side for him but he now proposes to devote more time to specifically training for it.

Budget Summary March 2021

We are pleased to provide our summary of the Chancellor’s 2021 Budget, which can be viewed by clicking on the image below.

With the UK having been adversely affected by the coronavirus (COVID-19) pandemic, Chancellor Rishi Sunak presented the 2021 Budget against a backdrop of ongoing economic hardship. It was therefore perhaps not surprising that the announcement included revenue generating tax increases and the freezing of allowances, the headline perhaps being the 31% increase in corporation tax rates due to take effect in 2023. There is also some good news with big tax incentives to encourage corporate investment as well as targeted tax breaks for some sectors.

Budget rumours about higher capital gains tax rates coupled with reduced annual exemptions were fortunately wide of the mark and inheritance tax changes were limited to the freezing of reliefs.

Our Budget Summary provides an overview of the key announcements arising from the Chancellor’s speech. However, it also looks beyond the headlines and offers details on the less-publicised changes that are most likely to have an impact upon businesses and personal finances.

Should you have any questions or require any advice in connection with the Budget please email us at info@melloroxland.co.uk or give us a call on 0115 9644900.