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  • FIRST POST
    • Former MSE Wendy
    • By Former MSE Wendy 18th Mar 08, 3:18 PM
    • 868Posts
    • 1,782Thanks
    Former MSE Wendy
    April 2008 Income Tax and NI Changes: How will they affect you?
    • #1
    • 18th Mar 08, 3:18 PM
    April 2008 Income Tax and NI Changes: How will they affect you? 18th Mar 08 at 3:18 PM
    Updated 2 September 2008
    (Comments in the discussion may relate to earlier incarnations of this information)


    After the huge '10p tax row' in April, the Government upped everyone's income tax personal allowance (the amount you pay no tax on) from £5,435 to £6,035 to make up for it.

    This takes effect next Sunday (7 Sept), so if you earn between £6,035 and £40,835, watch your payslip to ensure you get the extra cash.

    What's the background?

    In the government's 2007 Budget report, it got rid of the old 10% rate of income tax, and reduced the 'basic rate' from 22% to 20%. Yet when this change was implemented in April 2008, public uproar followed as people earning between around £6,000 and £15,000 actually brought home less pay.

    To fix this imbalance, on 13 May 2008, the Chancellor announced everyone's tax-free Personal Allowance for 2008/09 (i.e. this tax year) would rise £600 to £6,035, to reimburse those who lost out when the 10p tax-rate was scrapped; and give a tax cut to many others.

    What happens now?

    Even though this was announced in May, personal allowances officially increase to £6,035 on 7 September.

    For all basic-rate taxpayers the impact is a £120 gain; this money will go straight into your pay, with the first £60 coming in September, and an extra £10 per month for the rest of the financial year until next April.

    You shouldn't need to do a thing in order to get this cash; if it doesn't appear in your next paypacket, speak to whoever deals with the payroll at your place of work.

    Will this make up for the end of the 10% band?

    If you are a basic-rate taxpayer earning £6,035 or more, you'll pocket £120 more over the year than you would have done before this announcement.

    This will make up what you lost when the 10% band disappeared, unless you earn between £7,130 and £9,075, when you could still be up to £30 out of pocket compared to last year. The Govt says many will have had tax credit rises too and possibly balance this out, but if it applies to you read my full Benefits Check-up article to find out more.

    Higher Rate Taxpayers won't gain (or lose)

    For higher-rate taxpayers, the 40% threshold will shift down by £600 to £40,835, meaning most will earn exactly the same as they would have done (if you earn between £40,835 and £41,460, you make a small profit).

    See the Chancellor's full statement from May 2008

    For a bigger range of data and figures for overs 65s go to HMRC rates


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    Last edited by Former MSE Andrea; 02-09-2008 at 6:51 PM.
Page 12
    • Paul_Herring
    • By Paul_Herring 4th Sep 08, 4:13 PM
    • 6,935 Posts
    • 3,619 Thanks
    Paul_Herring
    Potential avenue for questions if anyone's interested: http://news.bbc.co.uk/1/hi/programmes/moneybox/7595767.stm
    Conjugating the verb 'to be":
    -o I am humble -o You are attention seeking -o She is Nadine Dorries
  • Lolliloo
    I am on maternity leave currently (Started June 2nd and will end Feb 28th)
    So my earnings to date so far are only currently approx 5900 so will I qualify for the 60 in Sept. My earnings for the whole of the year to end of March 09 are expected to be approx 10k but I have only taken home half of this so far
  • Saltydog
    It would appear that over-75's have been left out of this corrective action as their personal allowance as at 30th Sept will be the same as it was at 5th April 2008.

    Somebody correct me if I'm wrong about this please!

    Saltydog
    • noh
    • By noh 7th Sep 08, 9:35 AM
    • 5,331 Posts
    • 3,641 Thanks
    noh
    It would appear that over-75's have been left out of this corrective action as their personal allowance as at 30th Sept will be the same as it was at 5th April 2008.

    Somebody correct me if I'm wrong about this please!

    Saltydog
    Originally posted by Saltydog
    Most over 65s have been left out as their allowances were already substantially increased.
    http://www.hmrc.gov.uk/employers/epa-understanding.htm#6

    Nigel
  • Jo Jo B
    Can anyone advise. I earn 16k at present and having checked my payslip no 60. Spoken with pay office who say some will receive it others won't but that mine is in the form of 60 points added to pay code taking it from 543 to 603.

    Confused and not confident enough to challenge them without more info. I can't see why it wouldn't apply having read previous threads.

    Any ideas?
    • I-LOV-MONEY
    • By I-LOV-MONEY 25th Sep 08, 1:28 PM
    • 1,090 Posts
    • 600 Thanks
    I-LOV-MONEY
    Can anyone advise. I earn 16k at present and having checked my payslip no 60. Spoken with pay office who say some will receive it others won't but that mine is in the form of 60 points added to pay code taking it from 543 to 603.

    Confused and not confident enough to challenge them without more info. I can't see why it wouldn't apply having read previous threads.

    Any ideas?
    Originally posted by Jo Jo B
    I presume this is your September salary. You don't actually receive a refund as such, but you should pay 60 less tax this month. Compare your pay slip with last month (if you haven't thrown it away!), if not check your bank statement for how much was put into your account.

    If that hasn't happened, re-send your message and hopefully someone else with a better knowledge of the tax system will be able to help.
    Thank you for reading this message.
    • Paul_Herring
    • By Paul_Herring 25th Sep 08, 1:40 PM
    • 6,935 Posts
    • 3,619 Thanks
    Paul_Herring
    I earn £16k at present and having checked my payslip no £60
    Rephrasing ILM's answer - your gross pay will not change (what I think you were expecting,) your net pay should be up by up to £60 from last month (since your income tax should be less as a result of your tax code changing.)

    Since you seem to indicate that you're on a salary, it shouldn't be too difficult to check.
    Conjugating the verb 'to be":
    -o I am humble -o You are attention seeking -o She is Nadine Dorries
    • I-LOV-MONEY
    • By I-LOV-MONEY 25th Sep 08, 2:25 PM
    • 1,090 Posts
    • 600 Thanks
    I-LOV-MONEY
    Thanks Paul. That was what I was trying to say, but you explained it better !
    Thank you for reading this message.
    • Lokolo
    • By Lokolo 25th Sep 08, 2:47 PM
    • 20,212 Posts
    • 15,397 Thanks
    Lokolo
    When will I know, before the tax year, what next years allowance is likely to be? Or do they announce is at a certain time?
    • Paul_Herring
    • By Paul_Herring 25th Sep 08, 3:42 PM
    • 6,935 Posts
    • 3,619 Thanks
    Paul_Herring
    When will I know, before the tax year, what next years allowance is likely to be? Or do they announce is at a certain time?
    Originally posted by Lokolo
    It's usually mooted in the pre-budget speech (then confirmed in the budget speech in March,) though I'm having problems finding out when the pre-budget is supposed to be (appears to be Oct 9th)....
    Conjugating the verb 'to be":
    -o I am humble -o You are attention seeking -o She is Nadine Dorries
    • ANDENA
    • By ANDENA 25th Sep 08, 6:19 PM
    • 117 Posts
    • 21 Thanks
    ANDENA
    income tax refund
    I have my wages every fortnight i got 43.00 tax rebate and tax code gone up so you do get in your wages.
  • James cuck
    The changes to income tax will affect many people.
    • chris_m
    • By chris_m 23rd Jul 10, 10:17 AM
    • 7,458 Posts
    • 29,054 Thanks
    chris_m
    The ones on April 2008, the subject of this thread, did so over 2 years ago ;-)
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