Annual allowance charge meaning

In this issue Employment taxes Budgets and Finance Bills VAT International Taxes management and litigation Companies and corporation tax Anti-avoidance Devolution Pensions LexTalk®Tax: a Lexis®Nexis community Daily and weekly news alerts New and updated content Dates for your diary Trackers Latest Q&A Useful information Employment taxes Royal Assent for National Insurance Contributions (Secondary Class 1 Contributions) Act 2025 The National Insurance Contributions (Secondary Class 1 Contributions) Bill—bringing in an uplift to 15% for the main rate of employers’ secondary Class 1 National Insurance contributions from 13.8%, and cutting the secondary threshold to £5,000 per annum—was first set out at Autumn Budget 2024 and obtained Royal Assent on 3 April 2025. The provisions apply from 6 April 2025. See: National Insurance Contributions (Secondary Class 1 Contributions) Act 2025. HMRC publishes Employment Related Securities Bulletin 59 (March 2025) Private Intermittent Securities and Capital Exchange System (PISCES)—policy...

Summary of changes From 1 April 2024: new rules for calculating holiday entitlement and pay for irregular hours and part‑year workers (including 12.07% accrual and an option to use rolled‑up holiday pay); annual National Living Wage/National Minimum Wage uplift and removal of the live‑in domestic worker exemption; higher Agricultural Minimum Wage rates in Wales; and increased VAT registration (£90,000) and deregistration (£88,000) limits. From 6 April 2024: flexible working becomes a day‑one right with revised processes and an updated Acas Code; paternity leave/pay reformed so two separate one‑week blocks can be taken within the first year; introduction of unpaid carer’s leave; extended redundancy protection during pregnancy and for a period after family leave; Employment Tribunal rule changes and higher compensation caps; uplifted Vento bands; higher SSP; Class 1 main employee NIC cut to 8% while weekly thresholds (including the £123 LEL) remain static; veterans’ employer NIC relief extended; van benefit and car/van fuel benefits frozen; higher high income child benefit charge threshold with tapered application; and...

In this issue: Court of Protection Elderly and vulnerable clients UK taxes for Private Client HMRC Manuals updates Tax avoidance, evasion and non-compliance Budgets and Finance Bills Pensions, insurance and tax efficient investments International Question of the week Daily and weekly news alerts LexTalk®Private Client: a Lexis®PSL community New and updated content Dates for your diary Trackers Latest Q&As Useful information Court of Protection An appeal was brought against a Circuit Judge’s decision in the Court of Protection, which had summarily resolved the best interests of an elderly patient, VT, on residence and care before medical evidence had been obtained (VT (by her litigation friend, the Official Solicitor) v NHS Cambridgeshire and Peterborough Integrated Care Board). The matter came before the High Court in Court of Protection proceedings. The appeal followed the summary disposal of a contested best interests dispute when VT’s capacity remained in issue, and although...

Being a member of an occupational or personal pension scheme allows individuals to utilise tax reliefs throughout their working life to build a retirement pension. This Practice Note outlines, in broad terms, the principal areas where members can maximise available tax reliefs to improve their retirement benefits. It highlights the following features and, where relevant, flags certain pitfalls to avoid: pensionable earnings personal contributions their interaction with the annual allowance Previous discussions of these topics would have referred to the lifetime allowance charge and the lifetime allowance; the lifetime allowance charge was abolished with effect on and from 6 April 2023, and the lifetime allowance itself was abolished with effect on and from 6 April 2024. Further information is available at PTM164100 - Information and administration: overview of the information requirements in respect of the lifetime allowance. Pensionable earnings For employer and individual contributions to registered pension schemes to attract tax relief, those contributions must be calculated by reference to...

Private Client England & Wales glossary A Abatement When, after settling the deceased’s funeral costs, debts and liabilities, the remaining estate cannot satisfy all legacies in full, the gifts are reduced accordingly, unless the Will shows a different intention. In a solvent estate, the order for reduction appears in Part II of Schedule 1 to the Administration of Estates Act 1925. Refer to Practice Note: Payment of legacies. Accruals basis Where income is taxed on an accruals basis, it is attributed to a given tax year by reference to the number of days within that year during which the activity giving rise to the liability accrued. See Practice Note: What is the basis of income tax?. Accumulation and maintenance (A&M) trust A form of non‑interest in possession trust designed to benefit children and young people up to 25, which received favourable inheritance tax treatment between 1975 and 2006. See Practice Note: Accumulation and maintenance trusts—IHT [Archived]. Accredited Legal Representative (ALR) ...

FORTHCOMING DEVELOPMENT : Under section 10 of the Finance Act 2022, the normal minimum pension age (NMPA) is set to rise from 55 to 57 with effect from 6 April 2028, excluding members of the public service schemes for firefighters, police and the armed forces. It also introduces a right for members of registered pension arrangements to access benefits before 57 where, on or before 4 November 2021, they already held an ‘unqualified right’ to do so, or were actively transferring to a scheme that, by that date, offered an unqualified right to a protected pension age below 57. To rely on this 2028 protection, the scheme’s rules must have, as at 11 February 2021, conferred an unqualified right to draw scheme benefits before age 57. For more detail, see Practice Note: Increasing the normal minimum pension age (NMPA) to 57—pensions impact...