Starting on 6th April 2009, the following changes will come into effect:
An increase in personal tax allowance by £130 above indexation for 2009-10.
The increase to the child element of the child tax credit by £25 above indexation has been brought forward from April 2010 to April 2009. The child element of Child Tax Credit has therefore been increased by £150 in total to £2,235.
An increase in the basic State Pension by 5%, in line with prices, with the level of a basic full State Pension rising from £90.70 to £95.25 a week.
Confirmation of an above-indexation increase of 4.8% in Pension Credit’s minimum income guarantee from £124.05 to £130.00 for single pensioners and from £189.35 to £198.45 for couples in 2009-10
A new ‘Health in Pregnancy’ grant of £190 for all pregnant women payable at the 25th week of pregnancy.
However, the press release does not mention the above inflation increase to the basic rate band, which comes with a corresponding increase to the band liable to employee's national insurance at the full rate, nor the increase to the inheritance tax nil rate band.
Ian Abrey, Principal at Hillier Hopkins comments, “The Treasury’s press release makes no mention of the increase last week to fuel duties. More importantly the delay in this year's Budget to 22 April means that there may be further measures - which have yet to be announced - but which take effect from today. Care needs to be taken with any tax related decisions over the next two weeks.
“It is also important to remember that further pain is still to come - with effect from 6 April next year personal allowances will be restricted for some higher rate taxpayers and from 6 April 2011 the rate of national insurance will rise and there will be a new 45% top rate of income tax.”