The current tax year comes to an end this week and with new rules coming into effect, an increased personal allowance should see workers’ take-home pay go up.
The personal allowance is the amount of income a worker is not required to pay tax on.
Following an announcement in last year’s Autumn Budget, the personal allowance for earners in the basic rate band (those on salaries between £11,501 and £45,000) will rise to £11,850 on Friday 6 April. For earners in the higher rate band – those on salaries from £45,001 to £105,000 – the personal allowance will increase to £46,350.
When the chancellor, Philip Hammond, announced the new rates in November last year, the Treasury said the changes would represent a £1,075 reduction in the amount of tax paid by the typical taxpayer in 2018-2019. The average worker on the national living wage will take home more than £3,800 extra in the new tax year.
However, as take-home pay rises so will council tax, with households across England set to be hit with the largest hike in 14 years leaving the average home paying £81 more.
Council tax bills in shire areas will pay highest rate at £1,749, up by £86, according to the Ministry of Housing, Communities & Local Government, and people living in Band D properties in England will see an average 5.1 per cent increase in their tax bill, rising to £1,671.
Meanwhile, from Monday anyone buying a new diesel car will pay an extra supplement if the vehicle is not certified to the real driving emissions 2 standard.
In practical terms, according to the Treasury, this means someone purchasing a typical Ford Focus diesel will pay an additional £20 in the first year, a VW Golf will incur a charge of £40, a Vauxhall Mokka £300 and a Land Rover Discovery £400.
Tax reductions announced in last year’s Budget which have already come into force include the scrapping of stamp duty land tax for first time buyers purchasing properties worth up to £300,000.
