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April 1st New Law Change to Benefits

A range of rule changes coming into full force during the month of April include taxes and welfare benefits. Check how they will impact daily life and cash in your pocket.

The 'April Fools' might be those who benefit the least from a cluster of new UK laws. Find out whether you might gain or lose as they take effect from the start of the new tax year.

Introducing Significant Law Changes in April

There has been an abundance of press attention on the new legislation and how it might save you some money.

So, what are the new rulings that are going to impact your household income and outgoings the most?

It may affect how you budget your family finances and influence your chosen career or the car model that you decide to buy next.

The government swept in new law changes to tax and some employment laws. The benefits and welfare system did not go unscathed either.

The National Minimum Wage hourly rates increased for those aged 23 and over. But, on the flip side, the price of road tax and medical prescriptions also went up.

But wait – there’s more:

It becomes easier for school leavers to secure an apprenticeship. Anyone facing redundancy gets new benefits of protections under statutory redundancy pay increases.

The list of new rules’ changes shows how they might benefit millions of people in their day-to-day lives. It could certainly change the way you pay for childcare and it might even change the way you drive.

Minimum Wage Rise: Will You Earn More?

The UK Government presented a large pay boost from April for those earning the lowest wage. The hourly rate went up to £9.50 for workers aged 23 or older.

Note: The minimum wages rise also goes up for those aged 18-20 to £6.83 an hour and peaks at £9.18 for 21-22 year olds.

Tax-Free Childcare: Can You Save £2,000?

Research suggests most parents pay out over £200 a week for full-time childcare. The cost still soars over £100 per week for hiring a part-time child care worker.

April 28th brings in the start of a new Tax-Free Childcare initiative for working families.

It will eventually replace the Childcare Voucher Scheme as it rolls out over the coming months.

The changed system sees the government contributing 20 pence for every 80 pence spent by parents on childcare fees.

Thus, you could equate that to 20% tax that some people pay on their earnings. That is why they call it the Tax-free Childcare Scheme.

UK Government announced it will cut the cost of childcare for working families by up to £2,000 per child each year. The amount increases up to £4,000 for parents with disabled children.

Want to know the best part?

Parents of 3 and 4 year olds can apply for 30 hours of free child care from September in England. These welfare benefits for children could be worth £5,000 per child to some families.

The Childcare Tax-free Scheme rolled out to more parents late in 2017. The most benefit is likely to be for those with children under the age of 12 (or under 17 with disabilities).

Families need to work out the best deal for their situation. But, you can apply if you are a working parent with any children less than two (2) years old.

NHS Prescription Prices Go Up

Prescription charges increase from the 1st of April. Each medicine or appliance dispensed sees a rise that means it will now cost £9.35 per single item.

The current exemptions remain in place for those with specific long term conditions. It includes epilepsy, cancer, and diabetes. The same exemptions also apply to pregnant women, new mothers, and children under 16.

The April price rise to NHS prescriptions does not affect anyone on a low income or seniors over sixty (60) years old.

Note: You can get a 3 or 12 month NHS Prescription Prepayment Certificate online. That could save you money if you buy a lot of prescribed medicines.

Car Road Tax: Will You Pay More?

The VED (Vehicle Excise Duty) rules for taxing first registered cars changed in April 2017. New cars bought on or after April the 1st must be zero-emission to get road tax exemption.

New cars bought on or after April the 1st must be zero-emission to get road tax exemption.

In most cases zero-emission means 100% electric cars for road tax bands and rates. So, that is not good news for anyone planning to buy a low-emission car or a diesel-powered vehicle.

Other vehicles bought from new will see road tax charges at a tiered first-year rate. Because this gets based on its CO2 emissions it could prove to be a lot more expensive for some vehicles.

So, here’s how it works:

CO2 emissions alone had been determining how much road tax you pay. No Vehicle Excise Duty was due on cars emitting less than 100 g/km of carbon.

But, everything changed from April 2017. Carbon emissions will only rule a part of road tax rates in the first year of vehicle registration.

But, everything changed from April 2017. Carbon emissions will only rule a part of road tax rates in the first year of vehicle registration.

The new VED rates will see a fixed fee of £140 each year after that. There will also be an extra £310 charged on models which have a published price more than 40,000 from new.

Note: This only applies to new cars bought on or after 1st April 2017. Check the section on car tax bands for the current information.

A Rise in Statutory Pay Rates

There will be extra benefits for those who qualify for various statutory payments. Statutory maternity, paternity, adoption and shared parental pay will all see increases from the beginning of April.

Redundancy Pay is Going Up

There are new upper limits on statutory redundancy payments beginning the 6th of April. Those who qualify will receive an increase in their redundancy pay. As a rule, weekly payments are subject to an upper threshold which is now £571.

Note: The highest award statutory redundancy pay also increases from £16,140 to an upper limit of £17,130.

New Immigration Skills Levy

The government aims to reduce the country’s reliance on migrant workers. That is why they are introducing a new immigration skills charge due to take full effect from the 6th of April 2017.

Sponsoring migrant workers in skilled roles will see a two-tier levy for employers. Large businesses can expect a charge of £1,000 per employee each year. Whereas, smaller organisations and charities get charged the reduced rate of £364.

Extra Funding for Apprenticeships

The government claims to use the new immigration skills charge to fund apprenticeships. They expect to raise £3 billion a year from large organisations with a wage bill of over £3 million a year. That is how they plan to exclude harming smaller companies.

This extra money will go to businesses to offer apprenticeships and on-the-job training. That means anyone over 16 looking to learn a trade and get paid might excel this year.

Council Tax to Increase

You will be lucky if you don’t see your council tax bill rise in April (up to 5% increase). We expect the increases to be between £50 and £100 for properties in band D.

Note: Another section contains more information about Council Tax rules and how property banding works in the United Kingdom.

Government-Backed Mortgage Scheme

April will see the return of low deposit and 95% mortgages in the form of a new government-backed guarantor scheme.

Furthermore, they will be compensating banks and building societies if a borrower is unable to meet the monthly repayments.

The extended stamp duty holiday is scheduled to run until the end of June 2021. Thus, house purchases up to £500,000 will remain tax-free.

Tax-free Allowance for Pensions Advice

There is a concerted effort to make financial advice more affordable. The government is encouraging consumers to get proper advice when planning for retirement.

People will get a new annual allowance from 6th April 2017. They can use it for employer-funded pension advice. It is a £500 allowance free of tax and NI. The price for any advice above that level would be subject to tax and NIC as benefits in kind (BIK).

Further Law Changes Coming Into Force…

Health lobbies and anti-smoking groups have praised other law changes coming into force. Retailers must phase out any tobacco products with branded packing. They must also discontinue selling small size packets of tobacco and cigarettes.

Brand packaging must be identical and display the standard drab green template. The new laws ban packets of 10 cigarettes and tobacco pouches weighing less than 30 grams.

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How New Law Changes Might Benefit You from April in United Kingdom