MANAGING DIRECTOR OF LAW FIRM GANNON, 50
Having started her own business 11 years ago, she used to earn in excess of £170,000, but the past year has been very difficult and her income is greatly reduced. She doesn’t have much by way of a pension plan. Catherine lives with two children, aged 10 and 13, in a home she owns, with a mortgage. She uses the tube to travel around London to meet clients.
BDO’S BUDGET TEAM SAYS:
Catherine is not expected to benefit from the new childcare scheme which will apply from Autumn 2015, as her children will be above the eligible ages when the programme is introduced. Depending on how far her income has fallen, she may now be able to claim child benefit, which was removed for those earning over £60,000 on 7 January. The movement in her income will also be crucial for determining the effect incoming tax rate changes will have. Income received in excess of £150,000 will only incur income tax of 45 per cent – reduced from 50 per cent – from the 2013-14 tax year. Given that Catherine hasn’t contributed significantly to a pension, she may be unaffected by the reduction in the double tax-free contribution limit, which will fall in 2013-14 from £50,000 to £40,000.