The new tax year means new savings opportunities, tax windows and changes in allowances.
Here's a few updates for this 'New Year' and how we can help you kick-start the new window.
For this new tax year, the basic Personal Allowance is £12,570. Anything you earn above that will be taxed at the basic rate of 20%, until you hit the threshold for the 40% higher rate at £50,271.
These thresholds are set to be frozen right up until 2026 – which could be a big deal for some people. If your annual pay goes up but your Personal Allowance doesn’t, over time you could well find yourself starting to pay the higher rate of tax. At the same time, people on lower incomes could find themselves paying tax when they weren’t before as their earnings rise.
Some good news to start the new tax year. For 2021/2022, there will be no increase in corporation tax. However, on 1 April 2023, the Corporation Tax main rate for non-ring fenced profits will be increased to 25% applying to profits over £250,000. A small profits rate (SPR) will also be introduced for companies with profits of £50,000 or less so that they will continue to pay Corporation Tax at 19%. Companies with profits between £50,000 and £250,000 will pay tax at the main rate reduced by a marginal relief providing a gradual increase in the effective Corporation Tax rate.
First-time buyers, now's your chance! The biggest news for home-buying hopefuls is probably the return of 95% mortgages in April. Several lenders have already signed up to the scheme, which aims to put that first rung of the property ladder a little more in reach. The government is backing the loans to encourage more lenders to offer mortgages with low deposits.
At the same time, the stamp duty holiday is still running until the end of June. Properties worth up to half a million pounds won’t be taxed, with homes worth up to £250,000 keeping the holiday until the end of September.
If you or your older relatives are claiming the State Pension already, income will be on the rise by 2.5% from the 12th of April. That brings the full State Pension rate to £179.60.
For people still on the old-style State Pension, the rise will be £3.35 a week, for both A and B categories, to £137.60.
If you have any questions about how the above affects you or you would like to speak to the Wealth Management team, get in touch with Jak: firstname.lastname@example.org