New tax year begins
This week marks the beginning of the new tax year and some significant changes to the tax system.
Many of the changes have been introduced as a way of helping with the Government’s efforts at budget deficit reduction.
Among many changes, one of the biggest differences people will experience is in income tax. As from 6 April, the personal allowance, which marks the point at which income tax becomes payable, rises by £1,000 to £7,475.
However, the threshold at which higher earners become liable for the 40 per cent tax rate falls to £42,475.
The employee national insurance contribution for those who qualify climbs from 11 per cent to 12 per cent.
Anyone who pays NI over the upper earnings limit sees their charge rise by 2 per cent.
A land tax stamp duty rate of 5 per cent is to be charged on residential property transactions worth more than £1 million.
Pension contributions that are entitled to tax relief now have an allowance of £50,000, down from the previous figure of £225,000.
There is no longer a requirement to purchase a pension annuity by the age of 75.