WINNERS: Frank and Sally are winners in 2012/13 and hold this for 2013/14
Frank (81) and Sally (76) are a married, retired couple.
Frank has a state pension of £5,587 and an Occupational Pension of £5,824. Their investments consist of 100 shares in Santander with their main savings in cash ISAs. They like to go on two holidays each year to warmer parts of Europe. They have a Honda Jazz for quick trips to the shops and around the local area, averaging 2,000 miles per year.
|
|
|
|
|
17,752 |
(293) |
- |
|
18,274 |
(307) |
508 |
|
18,274 |
(307) |
0 |
|
0 |
(0) |
|
The changes to the age-related tax free personal allowance do not affect Frank and Sally, so there is no change in their position from 2012/13.
WINNERS: John and Sue are better off in 2012/13 by £143 and marginally keep ahead in 2013/14 by £15
John and Sue are both in their late 30s and have two children. Sue is a middle manager earning £50,000 pa while John stays at home to look after the kids. They have a VW Golf and average 15,000 miles per year. John and Sue take the kids on one holiday abroad per year.
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|
|
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37,217 |
(905) |
|
|
37,379 |
(924) |
(143) |
|
37,394 |
(924) |
15 |
|
15 |
(0) |
|
An increase in the tax-free personal allowance leaves John and Sue better off overall but the impact of this is reduced by the reduction in the 40% tax band.
WINNER: Steven is better off due to the increase in the tax free personal allowance
Steven has just finished university and is starting work as a trainee accountant in London on £28,000 pa. He has taken out the full student loan available to him and is starting to make repayments. Steven takes an average of three holidays per year, to Europe and visiting family in Aberdeen.
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|
|
|
|
20,232 |
48 |
|
|
20,402 |
52 |
166 |
|
20,622 |
52 |
220 |
|
220 |
0 |
|
WINNER: Alex is better off due to the increased personal allowances
Alex is a single parent in her late 20s. She earns £15,000 pa working 30 hours a week and relies on paid childcare for her one child. She has a 14-year- old Peugeot 106 and averages 12,000 miles per year.
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|
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24,230 |
(968) |
|
|
24,535 |
(973) |
300 |
|
24,755 |
(978) |
215 |
|
220 |
(5) |
|
Alex suffered a reduction in the childcare element of her working tax credit, with the percentage of recoverable costs decreasing from 80% to 70%, as of April 2011. However the increased tax-free personal allowance in 2012/13 and again in 2013/14 has helped to recover her position and year on year she is £215 better off overall.
WINNER: Overall Hugh is a winner due to the reduction in the 50% tax rate.
Hugh is a senior executive at a multi-national firm. He earns £200,000 pa and his wife is not in paid employment. They have no children. Hugh and his wife holiday in the Carribean and America. He has a Mercedes E-Class and a second car (BMW 5 Series) which his wife uses.
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|
|
|
|
102,387 |
(1,646) |
|
|
102,297 |
(1,686) |
(120) |
|
105,535 |
(1,702) |
3,222 |
|
3,238 |
(16) |
|
Hugh and his wife are slightly worse off in 2012/13 due to the changes to the thresholds. However, the decrease of the additional rate of tax from 50% to 45% leaves Hugh and his wife a further £3,222 better off with effect from 2013/14.
All cars are petrol vehicles
Frank and Sally
Frank has maximum state pension
Sally's state pension does not exceed her personal allowance
Frank has the mean Occupational Pension (using 2008/09 figures)
They have two holidays in Europe per year and fly standard class
John and Sue
The married couple have one holiday in Europe per year and fly standard class
Steven
The graduate makes two trips to Europe each year and flies standard class
He makes one return trip per year to see his family and flies standard class
Alex
The single parent pays £150 per week on child care
Hugh
The high earner's wife drives a BMW 5 Series and averages 10,000 miles per year
Hugh and his wife have two holidays per year, in America and the Caribbean, and fly upper class
