Find out if you will be better off in 2017 in UK?
Income tax (curtesy of This Is Money)
The tax-free personal allowance is going up: This is the amount of money you are allowed to earn before income tax becomes payable. It’s rising to £11,000, up from £10,600. It will rise again to £11,500 the following year – on 6 April 2017.
The 40p tax threshold will rise too: The amount of money you can earn before having to pay the higher-rate of income tax (40 per cent) increases to £43,000. This is an improvement from £42,385 in the 2015/16 year. It will rise again in April 2017 to £45,000 and the Government says it is committed to raising it further, to £50,000 by 2020.
A new national living wage of £7.20: for employees aged 25 or over. This actually came into effect on 1 April – five days ahead of the start of the new tax year. This is an improvement of 50p per hour compared to the £6.70 workers aged 21 and over are entitled to through the national minimum wage.
The national minimum wage will also increase: from 1 October 2016 it will go up for all workers under the age of 25. Here’s a table of the new pay rates, the current ones and those from previous years.
|UNDER 25? HERE’S WHAT YOU CAN EXPECT TO EARN PER HOUR|
|Year||21 and over||18 to 20||Under 18||Apprentice|
|*From 1 October 2016 – until then the 2015 rates apply|
Stamp duty is going up for landlords and those buying second homes: They will face a 3 per cent surcharge on the existing price bands from 1 April 2016. (See the box opposite for the full list of charges.)
Wear and tear allowance is going: The allowance allowed landlords to offset 10 per cent of their rental income against tax for maintenance, regardless of whether they carried out any repairs or not. From April 2016, they will only be able to claim for maintenance they can prove has taken place. That means that careful record keeping of receipts and invoices is essential. The government says the measure will have effect for expenditure incurred on or after 1 April 2016 for corporation tax payers and 6 April 2016 for income tax payers.
Capital gains tax
The rates of capital gains tax – which is a levy on the profits made from the sale of assets – will be cut for some from April.
The CGT rate for basic rate taxpayers will fall from 20 per cent to 10 per cent, while the rate for higher rate taxpayers will fall from 28 per cent to 18 per cent.
However, the rates of CGT payable on residential property sales will remain unchanged at 18 per cent for basic rate taxpayers and 28 per cent for higher rate taxpayers.
The CGT tax-free allowance will remain unchanged at £11,100.
Personal savings allowance launches: From 6 April, individuals with taxable income of between £17,000 and £43,000 a year will be eligible for a £1,000 tax-free allowance, meaning they can earn up to £1,000 per year in savings income without paying a penny of tax. Higher-rate taxpayers who have taxable income of between £43,001 and £150,000 will also receive an allowance, but it is capped at the lower amount of £500 per year.
Isa allowance frozen: It remains at £15,240, while the Junior Isa (and child trust fund) allowance stays at £4,080.
New Innovative Finance Isa arrives: Also known as the peer-to-peer Isa, the new tax wrapper allows your returns from your investments in peer-to-peer loans to grow tax-free.