THE new tax year is almost upon us and with it comes a raft of money changes announced in this year’s Spring Budget.
Jeremy Hunt stood in the Commons a week ago and outlined the government’s plan for the next financial year.
GettyJeremy Hunt stood in the commons just a week ago and outlined the government’s plan for the next financial year[/caption]
In his speech, the Chancellor unveiled several tax cuts and benefit reforms, many of which kick in as early as next month.
Elsewhere, there was a whole host of further changes first announced back in November as part of the Autumn Statement too.
Among these include a pay rise, as well as cash increases for pensioners and benefits claimants.
Other changes and measures announced will likely take longer to implement.
Below we reveal the key changes kicking in from April and what they mean for you and your money.
Minimum wage rise – April 1
Millions of Brits will bag a £1,800 a year pay rise next month when both the National Minimum and National Living wages rise.
The increase was first announced during the Autumn Statement in November by the Chancellor.
The government sets the different minimum rates employers have to pay their workers and they change every year from April 1.
There are two different minimum wage rates all workers should get across the UK – the National Minimum Wage and the National Living Wage.
The National Minimum Wage is the amount workers under 23 – but of school-leaving age – are entitled to.
While everyone aged 23 and over gets the National Living Wage.
However, this age will drop from April 1 this year, and workers aged 21 and over will be entitled to the National Living Wage.
Here are the rates that will come into force from April 1, 2024:
Aged 21 and over – £11.44, up from £10.42
Aged 18 to 20 – £8.60, up from £7.49
Aged 16 to 17 – £6.40, up from £5.28
Apprentices – £6.40 to £5.28
Household Support Fund scheme extended – April 1
Jeremy Hunt has extended the Household Support Fund (HSF) for the fifth time – adding a further £500million to the pot.
Funding for the fourth round of the HSF was due to dry up for good on March 31.
However, the new support will now extend the HSF scheme for another six months.
The scheme works by handing councils up and down the country a slice of funding available to dish out to Brits in need.
Each local authority gets a different portion of funding depending on the size of the catchment area, population, and number of vulnerable households.
The voucher or grant amounts vary by location, so you must check to see what you can get and how your council will pay you.
National Insurance cuts – April 6
More than 27million workers are in line for a £450 wage boost thanks to a fresh National Insurance cut.
The 2p reduction was confirmed by the Chancellor in the Spring Budget.
The change means that someone earning an average salary of £35,000 will save more than £448.60 a year.
The legislation is being brought in this week to enable the cut to come in from April 6.
Two million self-employed people will see the main rate of National Insurance slashed from 8% to 6%, working out at an average saving of £350 a year.
Combined with the two percentage points cut to NI that came into effect in January, this will be a total saving of around £900 a year.
To see exactly how much you’ll save, see our story.
High-Income Child Benefit Charge reforms – April 6
During the Budget the Chancellor outlined reforms to the high-income child benefit charge in a big boost for parents.
Currently, parents can claim £24 per week for their first or only child and an extra £15.90 a week for any additional children.
But if either parent or carer starts earning over £50,000, they have to start paying the high-income child benefit charge.
This means you have to pay back 1% of your child benefit for every £100 of income earned over the £50,000 threshold.
From April 6 though, the threshold at which parents have to pay the charge will be increased to £60,000.
As it stands, when you reach a £60,000 salary, you have to repay the full amount of child benefit received.
Also from April, the Chancellor announced this will go up to £80,000 to ensure fewer parents are caught out.
It means that parents will repay 1% for every £200 of income earned over these new thresholds.
Hundreds of thousands of parents will save an average of £1,260 next year.
In a further boost, Mr Hunt said the government will look to change the system to a household-based one by April 2026.
It means it’ll look at combined household incomes, instead of individual income.
Child benefit
Everything to know about child benefit:
How much is child benefit and when does it stop?
How long does child benefit take to claim and is it means-tested?
What age do child benefits stop and can I claim for a third child?
Are child benefit payments going up and how much more will I get?
Debt Relief Order fee abolished – April 6
As part of the announcements last week, Mr Hunt also revealed the government is scrapping the Debt Relief Order (DRO) fee.
A DRO is a personal insolvency debt solution for individuals who cannot pay their debts.
The government is removing the £90 administration fee from April 6.
Thousands of people are expected to benefit as it can be difficult to save up the cash if you have no income at all.
Capital Gains Tax cut – April 6
The capital gains tax (CGT) rate on property sales will also be slashed from April 6.
Mr Hunt said in the Spring Budget that the levy’s top rate of tax will be slashed from 28% to 24% which he claims will bring in more money as the reduction will encourage greater transactions.
You pay CGT on the profit you make when selling or disposing of an asset that has increased with value, with the gain being subject to tax and not the amount of money received.
ISA reforms – April 6
In November’s Autumn Statement, the Chancellor announced several changes to ISAs (independent savings accounts).
These changes will now be coming in from April 6.
It aims to simplify ISAs and provide more choice, meaning it will be easier for people to choose the best accounts for their needs and move money between them.
The government will allow multiple subscriptions to ISAs of the same type every year from next month.
It will also allow partial transfers of ISA funds in a year between providers from April 6.
The account opening age is also changing for any adult, to 18 from April 2024 – up from 16.
However, it is freezing the ISA annual allowance at £20,000, Junior ISAs at £9,000 a year and Lifetime ISAs at £4,000 a year.
Benefits rise – April 8
Millions of households on benefits, including Universal Credit, will get a payment boost worth up to £470 from next month.
The Government confirmed in its Spring Budget documents that the benefits will be uprated by 6.7%, the CPI measure of inflation from September last year.
Chancellor Jeremy Hunt first revealed that payments will be going up in line with inflation in his Autumn Statement last November.
Check how much more you’ll get in our guide.
How to check what benefits you could be entitled to
The quickest way to see what benefits you may be able to claim is to use one of the three benefit calculators recommended by Gov.uk.
Each one is free to use. They are:
Turn2us
Policy in Practice
entitledto
Before using the tools, make sure you have key financial information to hand, such as bank and savings statements, and information on pensions and existing benefits.
If you live with a partner or family, get their basic financial information together too as this could affect your claim.
For each of these, you’ll be asked information about your circumstances, such as your current employment and income.
You’ll also need to give information about yourself, including your age and who you live with.
You can then use the contact information on Gov.uk to get the ball rolling and apply for what you’re owed.
Of course, the tools only provide an indicator of what benefits you can claim – and usually don’t include means tested benefits, so you may be entitled to even more.
State Pension rise – April 8
Pensioners are also set for a bumper rise of up to £901 to their state pension payments.
The government confirmed in its Spring Budget documents that rates will increase by 8.5% as the triple lock remains in place.
The state pension rate is going up on April 8 – the first Monday after the tax year ends.
15 hours free childcare – April
Jeremy Hunt announced in March 2023 that eligible families of children as young as nine months will be able to claim up to 30 hours of free childcare a week by September 2025.
The changes will take place in a phased approach starting in April, when most working parents with children aged two years will qualify for 15 hours of free childcare.
It will be extended from September, allowing anyone aged nine months to be given the same amount of care.
Local Housing Allowance – April
Renters on benefits will get a major payment boost from April to help with record-high housing costs.
Local Housing Allowance (LHA) rates will rise for the first time since 2020.
The move was first announced in the Autumn Statement and confirmed again in the Spring Budget documents.
This will benefit 1.6million low-income households, who will be around £800 a year better off on average in 2024-25, the government said.
The allowance sets the maximum amount people renting from a private landlord can claim in Housing Benefit or Universal Credit.
From next month, rates will be increased to cover the cheapest 30% of local market rents in the 12 months before September 2023 after being frozen since 2020.
The allowance aims to ensure anyone renting a home among the cheapest 30% of private rental properties in their area should be able to cover their entire rent with just their benefit payments.
But the exact amount you can claim towards housing costs depends on the house prices in the area you live in and the size of the property you rent.
Rates are set differently for shared, one-bed, two-bed, three-bed and four-bed accommodation.
Meanwhile, here are four ways to avoid the child benefit tax trap – but still gain £1,248 a year in free cash.
Plus, here are 17 big money changes in 2024 and what they mean for you – including a £1,800 pay rise for millions and free childcare.
Spring Budget at a glance
Fuel duty will be frozen and the 5p cut extended for a year
Alcohol duty will be frozen until February next year
National insurance was cut by an additional 2p
An extension of the Household Support Fund for the fifth time
Households on Universal Credit will get an extra year to repay emergency loans from the Government
A new tax on vapes, which will cause prices to rise
A one-off new tax on fags to ensure they are more expensive than the electronic alternative
The high income child benefit charge was raised from £50,000 to £60,000
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