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What is fiscal drag?

What is fiscal drag?

The freezing of tax thresholds often leads to a phenomenon known as fiscal drag. When tax thresholds remain unchanged, taxpayers will likely pay more tax as their earnings rise without a corresponding increase in allowances. As a result, more people are...
Higher rate relief pension contributions

Higher rate relief pension contributions

You can typically claim tax relief on private pension contributions up to 100% of your annual earnings, subject to certain limits. Tax relief is applied at your highest rate of income tax, meaning: Basic rate taxpayers receive 20% pension tax relief Higher rate...
Current rates for Capital Gains Tax (CGT)

Current rates for Capital Gains Tax (CGT)

CGT is generally charged at a flat rate of 20% on most chargeable gains for individuals. However, if taxpayers are within the basic rate tax bracket and make a small capital gain, they may be eligible for a reduced CGT rate of 10%. Once their total taxable income and...
Gifts and Inheritance Tax

Gifts and Inheritance Tax

Most gifts made during a person’s lifetime are not subject to tax at the time of transfer. These gifts, known as "potentially exempt transfers" (PETs), can become fully exempt if the donor survives for more than seven years after making the gift. If...
Business cashflow

Business cashflow

The government offers the following information regarding business cashflow. If you do not have enough money coming in to pay for goods, services and taxes your company has, you are at risk of insolvency. Why is cashflow important? ‘Cashflow’ is the term...