18 Changes to Your Finances This April 2017

You’ll win some, you’ll lose some when it comes to cash in your pocket from Saturday 1st April 2017, thanks to a slew of new laws and rules…

Chancellor Philip Hammond’s Spring Budget changed everything from your income and outgoings to your childcare and even the way you drive. From upping the National Living Wage and offering tax free childcare to hiking up your council and car taxes – find out what you and your bank balance are in for…

For Richer

From Saturday 1st April 2017:

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1. Minimum wage workers earn more

If you’re over 25 and earning the National Living Wage, you’ll see a 4% rise in your hourly rate, increasing from £7.20 to £7.50 – giving you an extra £48 per month, if you’re working 40 hours a week. And the fun doesn’t stop there, because 18-20 year olds will now pocket a minimum of £5.60 and 21-24 year olds at least £7.05.

2. Parents can apply for tax free childcare

For every 80p you spend on childcare, the Government will contribute 20p – equivalent to the 20% tax you pay on your earnings, which is why this is called ‘tax free’. By applying today through Gov.UK, working families could receive up to £2,000 per year towards the cost of childcare for each child under 12 or up to £4,000 for children up to the age of 17.

3. Prepayment meter cap comes into effect

Using a pay as you go gas meter? Stop paying your old rate and take advantage of the temporary price cap, by topping up your meter. You could save £80 off your energy bills, say the Government’s Office of Gas and Electricity Markets, because the scheme should reduce your gas bill by around 10-15%.

Call your supplier to find out more, be that British Gas, E.On, EDF Energy or another energy company.

From Sunday 2nd April 2017:

4. Receive higher statutory family-related pay

Parents, your weekly rate of statutory maternity or paternity, adoption and shared parental pay will increase to £140.98 per week as of Sunday 2nd April 2017.

From Thursday 6th April 2017:

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5. Earn £500 more before paying basic income tax

You can now earn up to £11,500 before you pay income tax, rather than £11,000 – leaving as many as 20 million basic rate taxpayers with an extra £100 in their pocket. Higher rate tax payers could also save £400 per year, because the 40% income tax rate will now only apply to earnings above £45,000, rather than £43,000.

Want to check you’re paying the correct rate of income tax? Call HMRC today.

6. Claim a higher rate of sick and redundancy pay

Under the weather? You’re entitled to £89.35 per week in sick pay from now on. Plus, if you’re made redundant on or after Thursday 6th April 2017, you’re entitled to £489 per week, up from £479, if you’ve worked for the company for at least two years – the final amount you get depends on your weekly pay, length of service and age.

7. Get more for your State Pension

The newer flat rate pensions are increasing by 2.5%, giving you £155.65 rather than £159.55 per week. Alternatively, you’ll see your pension rise from £119.30 to £122.30 if you’re on the old system.

Check the status of your pension or ask any questions by calling the Department for Work and Pensions (DWP) today.

8. Take advantage of a new lifetime Isa

Aged between 18 and 40? Set aside up to £4,000 per year in the new lifetime Isa to save towards your first home or retirement – and the Government will give you up to £1,000 for free, in the form of a 25% bonus. You can make contributions until your 50th birthday and all the money will grow tax free.

9. Alternatively, save more in your current Isa

Did you know that you can now put £20,000 into your Isa during the next tax year, up from £15,240? Now you do.

10. Your family can inherit an extra £100,000 tax free

Those of you who are married or in a civil partnership can leave your family up to £850,000 of tax free inheritance, which is £100,000 more than last year, thanks to the new transferable main residence allowance on property within the estate.

From Monday 10th April 2017:

You’ll get an extra 2p in every pound you earn, when the Universal Credit taper is cut from 65% to 63% – don’t spend it all at once.

For Poorer

E.On customers will be charged an extra 13.8% for electricity and 3.8% for gas from Wednesday 26th April 2017. Plus, BT and BT Broadband, EE and Vodafone also are putting up prices.

But what else can you expect to hit your wallet from April 2017?

From Saturday 1st April 2017:

DVLA road tax

11. Car Tax hike

Buying a new car after Saturday 1st April 2017? You’ll be stung by higher rates of Vehicle Excise Duty (VED), depending on your engine emissions, thanks to the DVLA’s rule changes – which you can get up to speed with here. For the first time ever, even eco-friendly electric cars will have to pay road tax.

12. Pay 20p more for your NHS Prescriptions

NHS prescriptions, medicines and appliances, now cost £8.60. Although, you’re exempt from paying if you’re: suffering long term conditions like cancer, epilepsy or diabetes, pregnant, a new mother, over 60, a child under 16 or on low income.

13. Spend up to 5% more on your council tax

Nine out of 10 local authorities in England are expected to increase your council tax bill by up to 5% in April – so you can expect to pay an extra £61 council tax on your Band D property, for example. Meanwhile, the average Scottish Band D household will fork out for an extra 3% or about £32.

Cast your mind back just five years ago to 2012 when 90% of local authorities froze or cut council tax, only 35 hiked the price up. However, East Hampshire is the only local authority who’ll cut council tax in 2017.

14. Pay 2% more for your average water bill

Call your supplier to see how your water bill has changed, whether that’s Thames Water or someone else.

15. Add £1.50 to the cost of your TV licence

Get your money’s worth from your £147 TV licence by watching great TV – haggle for a better deal with Sky or see what Virgin Media, BT Sport or Amazon can offer.

From Monday 3rd April 2017:

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16. Parents must look for work when youngest child turns three, not five

Changes to Universal Credit mean that parents, you’ll have to look for work when your youngest child turns three, rather than five – affecting those of you with pre-school children for the first time, at an age when childcare is the most expensive.

From Thursday 6th April 2017:

17. Four million new families lose £545 per year tax credit Family Element

Starting a family? You can’t claim the tax credit family element anymore, worth £545 per year. And that’s not all, if you plan to have a third or subsequent child after Thursday 6th April 2017, you’ll no longer receive Child Tax Credits or Universal Credit benefits either – these are now limited to your first two children only.

18. Grieving families will be £12,000 worse off

Until Thursday 6th April 2017, widowed parents could receive financial support for 20 years after a bereavement – now, you’ll get just 18 months of help. It’s a move that could save the Government £100million a year, say the Childhood Bereavement Network, but it will affect as many as 6,000 families expected to claim this year.

How to fix mistakes on your tax return

Tax returns are a nightmare for freelancers and bloggers alike, it’s easy to get confused and make a mistake, but here’s how you fix it…

It’s that time of year again, the months when the tax man brings you pain. Whether you’ve fluffed your figures, claimed for the wrong deductions, forgotten to report income or to even sign your tax return form, you’re not alone.

1. Get it together

Panic is completely understandable, but freaking out won’t fix this little mess, so crack on. You have 12 months to amend your HMRC tax return, which should help you calm down a bit, but don’t wait –tackle the problem the minute you spot it.

2. Check everything twice, and then do it again

Resist the urge to throw your calculator at the wall or punch your laptop screen into next week. When your numbers don’t add up, re-read your tax return, and then ask someone to run a fresh pair of eyes over it. Putting your figures through Which? tax calculator may point out where you’ve gone wrong.

The devil’s in the details, so give the taxman as much information as possible – your tax return should give them a complete overview of your situation, complete with precise and exact numbers. Estimates and guesses won’t cut the mustard.

Don’t forget to also check your tax code and your Unique Tax Payer Reference number.

3. Speak to an accountant

If you’re up the creek with your accounts, call in the professionals. There’s nothing accountants don’t know about tax, in all its nightmarish intricacies, so ask for members of the Chartered (ICAEW) or Certified (ACCA) bodies for a hand. While you’ll find plenty of ‘professionals’ or ‘tax experts’ out there, you’re better off with someone who’s qualified.

contact numbers uk hmrc

4. Call HMRC

It’s impossible to recommend this enough. These taxmen aren’t as scary as you’re imagining, so dial this number and have a chat. HMRC’s lines are quietest from Tuesday to Thursday, between 8.30am – 10am, 11.30am – 1pm and 2pm-4pm, so with any luck you won’t be on hold for too long. However, lines open at 8am Monday – Friday, so you can try to join the front of the queue to get the ball rolling as soon as possible.

5. Set up a payment plan

If you’ve underpaid your tax, and you’re sent a bill that you can’t settle when they ask, arrange a payment plan with HMRC to split it into more manageable sums. It’s best to keep them in the loop and show that you’re trying to pay, than stew alone in your own panic.

6. Forget about the slammer

Tax is serious business, mistakes may land you a fine if HMRC think you’ve been careless or deliberately misled them, but don’t fret, you’re not winging your way to prison. It’s going to be okay.

7. Reward yourself

Go on, treat yourself when you’ve weathered the annual tax return storm, especially if you had to fix a few mistakes along the way. Surely you deserve it.

And even if you don’t need to fix a mistake on your tax return, HMRC are just a phone call away when you need to talk anything tax.

Deadlines:

  • By paper: Return tax for year 2015-2016 due by 31st October 2016
  • Online: Return tax for year 2015-2016 due by 31st January 2017