We were getting fit for less in last week's Finance Fridays. Today marks the start of the 2018/19 tax year. This can mean more money for some people and less for others. Let's see what the new tax year means for your finances.
Tax allowances – The basic tax band rises to £11,850 from £11,600. This means that the first £11,850 you earn this year is tax-free. The threshold for higher rate (40%) tax rises from £45,001 to £46,350.
Wages – From 1st April the National Living Wage for people aged 25 and over rose from £7.50 an hour to £7.83 an hour. If you are under 25 then it is classed as National Minimum Wage. The rates are now:
Age 21-24 £7.38 an hour from £7.05
Age 18-20 £5.90 an hour from £5.60
Under 18 £4.20 an hour from £4.05
Apprentice £3.70 an hour from £3.50
Buy-to-let investors – If you have a buy-to-let property and paying a mortgage on it you will be paying more now. Previously you could claim three-quarters of the mortgage interest at the higher rate of tax and a quarter at the basic rate. Now this changes to half and half.
Energy ratings for rented properties – If you own a property that you rent out privately you must now make sure that it has a minimum energy performance rating of 'E'. If it doesn't you must make improvements such as installing new windows, more efficient heating systems or better insulation. If the property doesn't come up to scratch then you could be liable for £4,000 civil penalty. The good news for people who do rent privately is that their energy bills could come down now if their property is upgraded.
Passport fees – The cost of a new passport has gone up considerably. How you apply for your passport also makes a difference to how much you pay. If you apply online the cost is £75.50 for a standard adult passport. However if you apply through a Post Office then the cost rises to £85. If you need to pay by cash, cheque or postal order you will have to apply through the Post Office as online applications only accept credit or debit cards.
Sugar Tax – Officially this is the Soft Drinks Industry Levy but it has been termed the 'Sugar Tax'. This is applicable to drinks which have a content of 1.2% ABV or less and has sugar added during production. Basically this will affect fizzy drinks which aren't produced as 'Diet', 'Zero' or 'No sugar' versions. For drinks with a total sugar content of 5g per 100ml the levy is 18p per litre. If the sugar content is more than 8g of sugar per 100ml then the levy rises to 24p per litre.
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