What does the new financial year mean to you?

I wrote a post last week about planning my tax return and some easy hints to follow to ensure next year it is easier but it also got me wondering about the other changes that the tax year brings.

The best change has to be the change in personal allowance, this means the current allowance of £9,440 increases to £10,000. A nice round number!

Some changes to VAT on the purchase of items over the internet will mean we need to pay the rate from our home country, in our case 20%. This means purchases from Amazon where we currently pay 3% (Luxemburgs rate) will increase to 20% from 1st January 2015.  This will have a huge affect on the prices of some items and may mean that I will be more likely to head to the high street rather than buy online. This scheme is EU wide and the government think this could bring in an extra £300 million a year!

Another big change is with savings. ISA’s in particular are going through a huge shake up.
The current ISA limit, until 6 April is £11,520. But only half of this, £5,760, can be used in a cash ISA however the whole amount could be used in an investment ISA. From 6th April 2014 until 30th June 2014 you will be able to save a maximum of £11,880, again up to half of which (£5,940) can be put into a cash Isa. However the good news comes on 1st July 2014.

From 1st July 2014 there will be two new types of ISA’s: New Cash ISA’s (NISA) and New Investment ISA’s. The limit also increases to £15,000. The great thing about this new limit is there are no restrictions on how you have to split your money so you can place £15,000 to a cash NISA and nothing to a New Investment ISA or £15,000 to a new investment ISA and nothing to a cash NISA or even a combination of amounts between a cash and an Investment ISA, up to the overall annual limit of £15,000. Scottish Friendly has put together a helpful guide and video to help answer some questions on this and – explains New ISA’s in everyday words. You can watch the video below