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All Change For The New Tax Year!

The following changes take effect from Friday 6 April 2007 – the first day of the new tax year:

 

Changes affecting individuals and families

• Annuities paid under Retirement Annuity Contracts to be taxed under PAYE.
• The inheritance tax threshold rises to £300,000.

Changes affecting employers and employees

• PAYE ‘Emergency Code’ becomes 522L and the PAYE threshold £100 a week or £435 a month.
• Employers should increase ‘L’ suffix PAYE codes for 2006/07 by 19 for 2007/08, unless an individual coding instruction for the employee has been issued by HMRC.
• The scale charge for vans available for general private use increases to £3,000 for 2007/08, or £3,500 if fuel is provided for private journeys.
• The weekly rate of Statutory Sick Pay rises to £72.55 and the earnings threshold to £87 a week.

Check your tax coding:

The best and potentially most profitable tax resolution for any new tax year is “I will monitor my tax code”.  All employees, and many pensioners, should have a tax code.

 

Changes affecting Tax Credit claimants

• From 6 April 2007, where notifying a change in circumstances is mandatory, claimants must notify that change within one month (rather than the present three months).

Changes affecting self-employed people and small businesses

• The New Construction Industry Scheme comes into force and the standard tax deduction rate for payments to subcontractors rises to 20%.
• The lowest wage that will frank an employee’s National Insurance record for pension and benefit purposes rises to £87 a week or £377 a month.