Markets easing back a little today,,,,
However, for many this will single more rises in costs,
The burden of tax falling on workers and employers has increased as a hotly-debated rise in National Insurance payments takes effect. Employees, businesses and the self-employed will pay an extra 1.25p in the pound. The extra tax is earmarked for government spending on social care. Some MPs opposed the move amid cost of living pressures, but mitigation will instead be introduced in July. Experts are urging people to check their status as a new tax year starts. Earnings levels at which people start to pay income tax have been frozen, increasing the chances of employees being dragged into a new band - with a higher rate of tax - if they receive a pay rise. How National Insurance will change Employees pay National Insurance on their wages, employers pay extra contributions for staff, and the self-employed pay it on their profits. In September, the government announced the rise in contributions from 6 April, in part to help ease the burden on the NHS. It means that, instead of paying National Insurance contributions of 12% on earnings up to £50,270 and 2% on anything above that, employees will now pay 13.25% and 3.25% respectively. The self-employed will see equivalent rates go up from 9% and 2% to 10.25% and 3.25%. Those of state pension age do not pay the tax at present, and nor do those on very low incomes. From now, employees will pay National Insurance contributions on earnings above £9,880 a year. From July, it will be paid on earnings above £12,570 a year. Taken together, the measures mean that, over the next 12 months, anyone earning less than about £34,000 a year will pay less in National Insurance than they did the previous year, while those earning more will see their payments rise. Other tax changes An increase in the tax on dividends is also coming into effect, to add to the funds channelled by the government into the NHS and social care. It has also gone up by 1.25p in the pound. Many private investors hold shares in an Individual Savings Account (Isa) which protects them from tax. However, some business owners pay themselves in dividends and so will face a tax rise. Early last year Mr Sunak said the thresholds at which income tax is paid would be frozen at April 2021 levels for five years (although Scotland has different levels). That means pay rises will push more people into higher tax bands. If a pay rise takes somebody from below £12,570 a year to above, then they will start paying income tax at 20% on the amount above £12,570. A shift in salary from below £50,270 to above means paying the higher rate of 40% on the amount above £50,270. The next threshold is at £150,000, when the additional tax rate of 45% kicks in. "A tax code of 1257L is currently used for most people who have one job or pension. If yours is different, make sure you understand why, so you're not paying too much tax," he said. At last month's Spring Statement, Mr Sunak pledged to reduce the basic rate of income tax by 1p in the pound before the end of the Parliament in 2024. For this new tax year, the personal allowance of capital gains tax has also been frozen at £12,300, so this much profit can be realised from assets in a year before tax is paid. The threshold for inheritance tax - a levy on estates when somebody dies - has also been frozen again at £325,000, as it has since 2009. A festival organised to encourage young people in east London to get vaccinated against Covid saw just 435 people jabbed. The four-day Summer Festival at Langdon Park cost Tower Hamlets Council £237,000 to put on, the Local Democracy Reporting Service (LDRS) reported. The cost for each person vaccinated would have been £535 per vaccine. A council spokesperson said "innovative ways" were needed to tackle low uptake. The festival held between 30 July and 2 August 2021, included a stage with live performances and free food vouchers were handed out to festival goers as were first and second Pfizer jabs. A Freedom of Information (FOI) request also showed the council did not record how many people attended the festival in total. Best Regards S Dhanda Head of Wealth @ ALFRED DUNN
www.alfreddunn.com
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