Tax year changes: new rules that begin today - from Pensions to Universal Credit

In the UK, 6 April marks a new tax year for UK households - and following the Budget announced last month by Chancellor Rishi Sunak there are some important changes on the way.

This is everything you need to know.

Housing Benefit

From 6 April, housing benefit is increasing to £59.20 from £58.90 for under 25s, and to £74.70 from £74.35 for 25s and over.

For those who are eligible to claim main phase Employment and Support Allowance, this will increase to £74.70 from £74.35

Tax Allowances

From 6 April, the amount that you can earn before you have to pay income tax, also known as your personal allowance, is increasing to £12,570.

The Government says: “As announced at Budget 2021, the Government will maintain the Personal Allowance at £12,570 and higher rate threshold at £50,270 for 2022 to 2023, 2023 to 2024, 2024 to 2025 and 2025 to 2026.

“The additional rate threshold is fixed at £150,000.”

The income limit for Personal Allowance will remain at £100,000 for the 2021/2022 tax year, and the income limit for married couple’s allowance will rise to £30,400 from £30,200.

Working Tax Credit and Child Tax Credit

From 6 April, both Working Tax Credit and Child Tax Credit annual allowance rates will increase for the 2021/2022 tax year.

Statutory Sick Pay

Statutory Sick Pay (SSP) is also changing from 6 April. Previously, the weekly rate was £95.85 before 6 April, and now it is £96.35.

To qualify for for SSP you must:

- Be classed as an employee and have done some work for your employer

- Earn an average of at least £120 per week

- Have been ill or self isolating for at least four days in a row (including non-working days)

How many days you can get SSP for depends on why you’re off of work.

Pension Credit and State Pensions

Beginning on 6 April, the new tax year will mark an increase in benefit rates for both the state pension and Universal Credit.

Pension Credit payments will increase from £173.75 to £177.10. Pension payments are expected to increase by 2.5 per cent, which means that those over the age of 66 on the full, new State Pension will receive £179.60 per week, which is an increase of £4.40.

For those on the basic state pension, category A or B, currently receiving £134.25 per week, they will be paid £137.65, which is a benefit increase of £3.40.

Maternity Pay

The rate of statutory maternity pay is expected to rise from April 2021. The current weekly rate of statutory maternity pay is £151.20, or 90 per cent of the employee’s average weekly earnings, if this figure is less than the statutory rate.

The rate of pay is expected to increase to £151.97.

Universal Credit

During the Spring Budget, Chancellor Rishi Sunak announced that the £20 a week Universal Credit payment uplift would be extended for a further six months, and that instead of weekly instalments, eligible claimants receiving Tax Credits would instead be issued a one off payment of £500.

Child Benefit

From 12 April, Child Benefit will increase to £21.15 per week for the first child, and then £14 per week for any subsequent children. This is an increase of 10p and 5p respectively.

Personal Independence Payments

Personal Independence Payments (PIP) will also rise to £89.60, from £89.15, for enhanced claimants and to £60, from £59.70, for standard claimants.

The PIP mobility component is also set to rise to £62.55, from £62.25, for enhanced, and to £23.70, from £23.60, for standard payments.