FINANCE Budgeting for success Jamie Crampton looks at monetary matters to be gained one way or another. B

The previously announced rise in tax allowances came into force on the 5th April 2012. From this date, earnings up to £8,105 will be tax free. l Tax at 20% applies on the next £34,370, meaning that you can earn (in total) up to £42,475 before moving on to the higher rate of 40%.

l Currently earnings over £150,000 are taxed at 50%, this will reduce in 2013 to 45%.

l These rates apply whether your earnings are from employment or self-employment, or a combination of the two.

For National Insurance the rates for employees (Class 1 NI) are that any earnings between £146 and £817 per week attract a rate of 12% NI, earnings above this are subject to a rate of 2%.

For self-employment there are 2 classes of NI l Basic rate of £2.65 per week which is paid if you are self- employed and have self-employed earnings (i.e net profits) over £5,595 in a tax year. If your profit is less you can be exempt from paying this.

Although there was much talk of Corporation Tax rates being reduced, for “Small Companies” (with profits under £300,000) the rate remains at 20%.

The headline grabber in the Budget was confirmation that fuel will rise by 3.02 pence per litre (plus VAT) in August 2012. For for those with longer memories this is a rise of 16 pence per gallon, making the average price around £6.50 per gallon. Whilst this is, of course, bad news for the majority of people there is help for those wanting to find the best fuel deal. Numerous websites that give comparison prices for petrol stations in your local area, or areas that you may be visiting, exist. Plus apps exist for iPhone/Andriod users that will tell you where the best prices are. A clue – they are usually NOT in a motorway filling station…

If the price rise isn’t enough to fuel your passion to save money, think of it like this – if you fill your 40 litre tank every week for a year paying 5 pence per litre more than you could have, you’ve just wasted £104. Which doesn’t sound like much, but if you charge £25 per hour, that’s an extra 4 hours 10 minutes work you needn’t have done. Just a thought.

THE AUTHOR

THE A Jamie

Jamie Crampton qualified as a chartered management accountant in 1995 and in 2008 set up Accounting 4 Fitness, dealing with clients in the fitness industry. In addition to

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this he also advises personal training students on setting up in business and works with accounting students at the University of Bedfordshire in Luton.

this he also advises

y now the full effect of Mr Osborne’s budget will be starting to be felt. In truth for the majority of people in employment or small businesses there wasn’t an awful lot

l If your self-employment makes a profit then any profit between £7,605 and £42,475 is subject to Class 4 NI of 9%, anything above this figure attracts a rate of 2%.

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The REPs Journal 2012;24(May):24-25