The new tax year invariably brings change, with new rates and allowances to grapple with. Moneywise explains how it could affect you.
Mark and Helen Jones have two children. Mark is the main breadwinner, earning £30,000 a year, while Helen has a part-time job, bringing in a further £7,000 a year.
Although their salaries will be unaffected due to the freeze in personal allowances, they will feel the pinch from increases in duty on fuel, which is set to rise by 1p a litre this year.
“We run two cars and the fuel duty increase will make us think about cutting back in this area,” says Mark.
Sarah Montague is a barrister earning £350,000 a year. From April, her income tax bill will rise by £22,590 as a result of the introduction of the 50% tax band.
She’ll also be hit by the change in pension rules. As she is self-employed she has made substantial annual contributions to her pension in the past, but the anti-forestalling rules mean she’ll only be able to get higher-rate tax relief on £30,000 this year as the average of her last three years’ contributions was higher than this at £47,000.
“I’m going to look at other ways to save for my future,” says Sarah. “I might look at venture capital trusts and enterprise investment schemes, because of the income tax relief they offer.”
David and Margaret Robinson, are in their seventies and retired. They’ll see an increase in their state pension from £152.30 to £156.15 a week in April.
They also receive £20,000 a year from private pensions, which won’t change, due to the freeze in personal allowances.
While they’ll have a little more income this tax year, they’re concerned about the freeze in the inheritance tax nil-rate band.
“Our home’s worth £500,000; with our other investments and assets, we’re close to the combined nil-rate band of £650,000. So we intend to take advantage of some of the IHT-exempt gifts.
"For a start, our granddaughter’s getting married soon, and we can each give her £2,500.”
* Rates and allowances could change in the 2010 Budget