The new tax year started on the 6th April and with each new year, it can signal changes to your finances.
From income tax to adjustments in pensions, we are all affected in one way or the other by the changes to tax.
But don’t despair just yet; these changes are for the better, meaning that you have more money in your back pocket.
With that in mind, we have come up with 10 easy-to-digest facts about the upcoming tax year:
1) Income Tax
The amount of income which you can receive tax free will increase by £600 from £10,000 to £10,600. This raise in tax free personal allowance will see a typical tax payer save a grand total of £825 since 2010. Also if you pay the higher rate of tax of 40%, the threshold of this has increased as well to £42,385, making everyone much better off!
2) Tax Credits and Child Benefits
If you claim child benefit, the amount you will receive will rise by 20p a week for your first child and 15p a week for any further children. If you pay for childcare, rates will be also be frozen until April 2016 at £175 a child per week.
3) Maternity and Paternity Pay
If you’re expecting a little bundle of joy this year, you will be pleased to know that the statutory rate of maternity and paternity pay has risen from £138.18 to £139.58 per week.
It’s good news if you are a saver, the starting rate of savings tax will be cut from 10% to 0% on savings up to £5000.
5) Tax Breaks For Couples
If you’re part of one of the 4 million eligible married or civil partnered couples in the UK, you will be allowed to transfer up to £1,060 of your personal tax free allowance to your partner, as long as you both don’t pay more than the basic rate of income tax.
6) Big Changes to Pensions
The changes to pensions this year are some of the most ground breaking for over one hundred years. For instance if you are aged over 55, you will be able to withdraw any amount from a defined contribution scheme, subject to income tax.
7) Creative Industries Flourishing
From this month, a new 25% tax relief for Children’s TV production begins, therefore the creative industries in the UK are encouraged to flourish.
8) Air Passenger Duty
if you’re off on holiday soon, it’s good news for families with children under 12, as you will no longer have to pay for Air Passenger Duty on economy flights.
9) Under 21?
If you are under 21 and are hired by an employer, they will no longer face having to pay national insurance contributions for you.
10) State Pensions
If you are reaching retirement age soon, the state pension which you will receive will be increased by 2.5% to the maximum of £115.95 a week.