What will the new tax year bring for you?
Posted on April 5th, 2011
As with every year in the UK, April the 6th marks the start of the new tax year, but should you be celebrating or drowning your sorrows? With taxes, employment rights and allowances changing, very few people will remain unaffected by this year’s changes.
The ConDem government is keen to show the other kids in the playground that they mean business by throwing their weight around in the hope of ‘saving the UK’. So how will it hit you? Here’s a rundown of the major changes to hit this month.
- ISAs- The first bit of good news to come this financial year is that Individual Savings Accounts (ISA) limit had increased from £10,200 to £10,680, an increase of £480 of interest free savings. It has been suggested that the limit will rise again over the next few years to reflect inflation.
- Personal allowances have increased which now means you can have tax free earnings up to £7,475 from £6,475 if you’re under the age of 65 and bringing home less than £100,000 a year. This is due to rise again next year to £8,105. This means that the basic rate tax payer will be taking home an extra £126 a year.
- National Insurance allowance has also increased from 11% to 12% of your annual salary. NI rates are also increasing by 1 percentage point. Also, for people earning more than £42,475 will see the additional NI charges increase from 1% to 2%.
- At last, a small bit of good news when it comes to fuel, as it has been cut by 1 penny per litre, not a huge help, but a saving none the less. The Chancellor has also promised £100 million towards repairing Britain’s potholes! Brought mainly by the awful weather last winter, they have been causing travel chaos; hopefully his promise will ease the nightmare!
- Housing benefits likely to leave the average home £600 worse off due to cuts. The maximum excess allowance of £15 is now to be scrapped as well as limits on payments being enforced (£250 a week for a 1 bed property, £290 for 2 beds, and £340 for 3 beds).
- Although housing benefits is being hit, first time homeowners may benefit from the changes. If your household earns no more than £60,000 a year, you would be required to raise 5% of the property value as a deposit to qualify for a 20% loan on the value of the home.
- Alcohol and tobacco prices are also increasing with the new tax year, so if you are considering drowning your sorrows, I’d think twice. The price of a pint of beer is up by 10 pence, a bottle of wine increasing by 15 pence and a bottle of spirits rising by 54 pence. Smokers will also take a hit with a 50 pence increase on a packet of 20 cigarettes, perhaps now is the right time to quit before it hits your pocket?
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Tags: New Tax, New Tax Year, Tax Year, Year
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