A Harrogate tax expert is warning that businesses could soon start to feel the effect of the Chancellor’s budget announcement as the new tax year takes hold.
Tom Roseff said the impact would be felt by businesses and individuals alike with those on middle incomes most affected.
“Millions of people should prepare to feel the impact of last month’s Budget as the government’s tax changes take effect at the start of the new tax year,” he said.
“Those earning below £35,000 however will gain from the increase in the personal allowance from £6,475 to £7,475, a measure expected to benefit 21 million taxpayers. Analysts have commented that this measure will also mean that 800,000 will pay no tax at all.
“However, the salary at which workers pay the 40% higher rate of tax will decrease from £43,875 to £42,475. This is expected to catch around 750,000 people,” he added.
“Crucially however, National Insurance has also increased by a further 1% on earnings above the upper earnings limit for both employees and employers, a change that came into effect on April 6.
“‘Those on the lowest incomes will benefit most from the tax changes whilst those on middle incomes will increasingly feel squeezed. Given high fuel prices and the increased rate of VAT many of us will need to tighten our belts this year as we cope with an increased cost of living whilst having less money in our pockets”.