Winners & losers from new tax year changes

Winners & losers from new tax year changes

The 6th April is known as a day of annual shake-up. This year, that is especially true. With a deal-less Brexit looming, the previous Chancellor’s, George Osbourne, austerity policies still coming into effect and Philip Hammond yet to completely own a fiscal direction – there have been varied, sweeping changes that affect workers from every nook and cranny of society.

As last week's changes come into force, we have documented the changes that will affect workers.

Below, we have compiled who is set to win and who is set to lose out.

Losers

Workers who are sick – Workers who go on Employment and Support Allowance will lose £30 a week. However, workers who are off sick and undertake permitted work will no longer be penalised.

Widowed workers with young children – Previously, bereaved families earned a lump sum followed by payments until the youngest child leaves school.

Payments will now be limited to 18 months. This puts an additional burden on single-person workers.

Low-paid workers with large families – Workers who take time out to have families will find that the government will now stop child tax credits for any child after the second child.

Stay-at-home parents – Parents are now forced into looking for work as soon as the youngest child is three, if they want to retain benefits for looking after their children.

Winners

Apprentices – For the first time, the government are investing in in-work training schemes for workers from all generations. This means, for mid and late-career earners, there is opportunity to gain skills that can use to future-proof themselves for incoming workplace demands.

With many companies now legally required to take-on apprentices, and pay them at living-wage rates, there has never been a better time to be an apprentice.

Unfortunately, for many apprentices £3.50 is still the going rate.

Minimum-wage workers – With the minimum wage rising 30p to £7.50 for workers aged 25 or over.

Higher-paid workers – The personal tax allowance will rise to £11,500 a year for lower-tax band workers whilst the higher tax band rate shifts upwards to £45,000.

Alongside this, workers who can afford to save will see tax free ISA allowances go up to £20,000.

Salary Sacrifice workers – Jack Curzon, Head of Scheme Design, Thomsons Online Benefits, spoke to HR Grapevine, about the government’s supposed “radical changes” to salary sacrifice.

Curzon said: “Fortunately, common sense from the Government prevailed and HMRC confirmed that it will support the most sought after benefits, including employer pension contributions, employer supported pensions advice, childcare provisions, annual leave purchase and cycle-to-work schemes.”


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