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2013/14 tax changes: How they affect you

2013/14 tax changes: How they affect you

Category: Money

Updated: 16/04/2013
First Published: 11/04/2013

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

A number of changes have been introduced in the world of tax, benefits and allowances since the new tax year began on 6 April.

Here is a quick run-down of what has changed and how this may affect you.

Capital Gains Tax (CGT)

The threshold for CGT has increased from £10,600 to £10,900. This means either 18% or 28% must be paid in CGT for profits made above these amounts.

Income tax

The amounts you can earn each year prior to being taxed have increased, depending on the earner's age, as follows:

  • Aged 65 years and under: Threshold has risen from £8,105 to £9,440.
  • Aged between 65 and 74 years: Remains at £10,500.
  • Aged 75 and over: Remains at £10,660

Workers who turn 65 after the 5th April 2013 can earn up to £9,440 before being subject to tax during the 2013/14 tax year.

The maximum income required prior to becoming a 40% 'higher rate' taxpayer has reduced from £42,475 to £41,450.

Additional rate taxpayers who are charged on income of £150,000 and over have had their rate reduced from 50p to 45p.

The amount paid on a dividend income by additional rate taxpayers has also fallen from 42.5% to 37.5%.

Council tax

The average council tax bill under Band D will rise from £1,444 to £1,456. (Back to top)

Inheritance tax (IHT)

The IHT threshold remains at £325,000 until April 2018, although for married couples, this is £650,000.

A tax bill of 40% must be paid on the value of a deceased person's estate above this threshold. This threshold does not apply if all possessions are left to the deceased's spouse.

Tax credits

Basic working tax credit has not been changed and remains at £1,920 per year.

The family part of child tax credit has also stayed the same at £545 each year, although the child's element has been increased by £30 per year to £2,690. (Back to top)

State benefits

The amount paid to women and men on maternity and paternity leave has increased to £136.78 a week from £135.45.

Unemployed people seeking work will be paid £71.70 a week, up by 1%.

The minimum income amount which is guaranteed by pension credit increased from £142.70 to £145.40, whilst the basic state pension amount also rose by 2.5% to £110.15 per week.

Parents will continue to receive child benefit of £20.30 a week for their eldest child aged under 18 and £13.40 for the child's younger siblings.(Back to top)

What next?

Download your FREE 2013-14 tax facts
Check out our guide to Tax on buy-to-let property and income

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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