It is important to be aware of the financial changes that can impact on your life and the start of the new financial year will see a number of alterations happening in the United Kingdom. It is important for individuals to look at the changes and determine what is going to impact on them. While there will be a number of online sites that provide guidance, every individual has their own circumstances and this means people need to consider their own situation.
There is a change happening with respect to the Individual Savings Account and it is going to be of benefit to people who are looking to save money. The allowance for an ISA was previously set at £15,250 but this will rise to £20,000 as of April 6th, so this is definitely something that is worth considering if you are in a position where you can save money. It is possible to place money into cash ISA or it can be placed in stocks and shares. One of the most important things to bear in mind when it comes to ISAs is the fact that you don’t need to pay tax on income that has been derived from ISAs and equally, you don’t need to pay tax on any capital gain from this style of saving.
Motorists have a different level of tax to contend with
One tax issue that isn’t commonly talked about but will be an issue for some people is car tax, or Vehicle Excise Duty, VED. Motorists buying a new car from the 1st of April 2017 will find that they have to pay a separate rate of VED. This is down to the fact that car emissions have been improved to such a lever, making them so much cleaner, that the vast majority of vehicles would no longer qualify under VED.
Anyone buying a new car will be placed into a special rate for the initial rate and this rate will be dependent on the standard of engine emissions and after that, the rate will be based on one of the three criteria, which are zero emission rate, standard rate or premium rate. The standard rate for motorists is £140 and anyone who has a luxury car, which is classed as a car which costs in excess of £40,000 will be forced to pay an additional £310. Motorists who already own their car will not witness any change to the rates that they face.
There will also be a change to inheritance tax and life should be made easier for people who are looking to pass property on to their offspring. At this point in time, a property or estate that is worth £325,000 is responsible for a tax liability of 40% of any worth above that level. However, this changes on the 6th of April when there will be a “transferable main residence allowance” for property in a person’s estate and this provides the option for people to hand over an additional £100,000 without any tax concern.
For couples who are married or who are involved in a civil partnership will be in a position to pass over £850,000 without having any tax concerns. There will also be a rise in this figure in 2021 when the permissible amount will rise to £1m. This is something that will give many parents and family members peace of mind because the tax implications of passing money or property on will have caused concerns for a lot of people.
Council tax changes will have an impact
When it comes to housing, council tax is a lot more relevant to most people and for people living in England, there is likely to be a steep rise in council tax. This change comes into effect from the 1st of April 2017 and the rise will work out at 4% on average. For people living in a Band D property, this rise is likely to be at a level of £61 over the course of a year. For district councils who don’t hold responsibility for social care, the rise will not be as prevalent and for the areas that do hold responsibility for social care, the rise may be as much as 4.99%.
There will also be increases in Scotland and Wales but these increases will not be as large as the increases that English homeowners have to contend with.
Andrew Reilly is a freelance writer with a focus on news stories and consumer interest articles. He has been writing professionally for 9 years but has been writing for as long as he can care to remember. When Andrew isn’t sat behind a laptop or researching a story, he will be found watching a gig or a game of football.