Interactive Investor

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By Kevin PeacheyCost of living correspondent

A new tax year has now started with calls for people to be " diligent" with their finances due to tax, pension and benefit rules.

Frozen Income Tax thresholds mean millions of people could be pulled into a higher tax band or see a greater proportion of their salaries taxed.

But, on Monday, The State pension and a host of benefits will rise by 10. 1%.

A - including council tax, water, and vehicle excise duty - came into force on 1 April.

Prices also continue to soar, particular The cost of grocery shopping, although The rate of increase is expected to slow later in The year.

" As keeping on top of rising prices remains a daily battle for many, The new tax year Personal Finance considerations can easily be missed, " said Myron Jobson, analyst at investment platform Interactive Investor .

" Hoping for The Best and preparing for The worst remains a diligent approach to finances. "

Income Tax rules

Income Tax bands - or thresholds - are frozen until 2028. That means any kind of pay rise could drag you into a higher tax bracket or mean a greater proportion of your income is taxed.

Had The thresholds gone up In Line with inflation, then someone earning £30,000 would have paid £398 less in tax in The Coming year, according to Interactive Investor .

The Office for Budget Responsibility - which independently assesses The government's economic Plans - estimated that freezing thresholds until 2028 will create an additional 3. 2 million new taxpayers. It said 2. 6 million more people would pay higher rate tax.

In England, Wales and Northern Ireland , you start to pay Income Tax on annual earnings of More Than £12,570, charged at 20%. You then pay tax of 40% on earnings over £50,270 a year.

The bands are different in Scotland, Changes announced in The Scottish Budget mean that everyone earning More Than £43,662 in Scotland will now pay more Income Tax .

The Chartered Institute of Taxation says someone with an annual income of £50,000 will pay an additional £63 in tax in The Coming year.

Anyone earning £150,000 in Scotland will pay an additional £2,432 compared with The year just gone, which will be £3,857 More Than someone earning The same salary elsewhere in The UK.

Across The UK, The threshold when The highest earners start paying The very top rate of tax has fallen from £150,000 to £125,140.

Higher pension and benefits such as universal credit

The new tax year also brings a significant increase to The Level of The State pension and a host of working age benefits - although it is technically on Monday that The Higher rates Kick In .

They will rise by 10. 1%, In Line with The Rising level of prices.

For The State pension, paid to those aged 66 and above, The Changes mean The amount received from Monday will be:

The benefits which are rising include universal credit, which is claimed by nearly six million people, many of whom are working. A single person receiving universal credit could get £400 more in The Coming year than during The Last 12 Months , depending on their circumstances.

Neil Hugh, from savings and retirement group Standard Life , said: " It is more important than ever that people know what sort of support is available to them. "

He Said Some People were unaware of The benefits for which they were eligible, or put off claiming because they thought they would be rejected, or it would take too long.

Benefit entitlement is also a gateway to, which can be worth hundreds of pounds and will resume later in April.

How To check if you can claim a benefit

There is a guide to benefits. when you qualify and what to do if something goes wrong, from The , backed by government.

You can also check benefits calculators run by charities and.

Pension, dividend, and capital gains tax changes

The tax-free limit for pension savings during a lifetime has now been abolished. The annual allowance has gone up from £40,000 to £60,000, after being frozen for nine years. Those who are already drawing a pension, but want to save more can now put in £10,000 a year, up from £4,000.

The - The amount of share dividend income you do not have to pay tax on - has been cut from £2,000 to £1,000, with a further reduction to £500 Coming In 2024-25.

So, anyone receiving More Than £1,000 a year in dividends will have to pay tax on The excess. You do not pay tax on dividends from shares inside an Individual Savings Account or pension funds. Up to £20,000 a year can be saved in an Isa.

The tax-free allowance on capital gains, made on selling an asset such as a buy-to-let property, has been cut from £12,300 to £6,000.

Plenty of time to fill out a tax return

Millions of people who are self-employed or have More Than one source of income will need to complete a for The tax year that has just finished. Some People may need to do so after.

However, The deadline to file online is The End of January next year.

Related Topics

Source of news: bbc.com