Tax confusion looms, says ACCA
Jul 28 2008
A change in taxpayer’s personal allowances could cause confusion for businesses, warns the Association of Chartered Certified Accountants (ACCA).
The personal allowance is the amount of money earned before tax is paid. The basic allowance for the 2008/09 tax year is £5,435.
However, in September the new allowance will come into force, which will backdate payments to April 2008, putting the new amount at £6,035.
Chas Roy Chowdhury, head of taxation at ACCA, comments: ‘The arrangements mean that pay packets will look different in September... The changes will only benefit basic rate taxpayers, not those paying 40 per cent.’
The basic rate tax band will reduce from £36,000 to £34,000. Anything above that amount will then fall into the 40 per cent band.