As world events continue to buffet the economy, the new tax year may not be the first thing on your mind. But using available tax breaks while you have them helps put you in a much more stable financial position for the short and the longer term.
In March 2021, Chancellor Rishi Sunak started repairing the nation’s finances by freezing, until 2026, many tax allowances that would typically go up each year.
In autumn 2021, he announced net tax increases for this year, which, alongside rising inflation and nominal earnings growth, are set to see disposable incomes per person fall by 2.2% this year – the largest fall since records began.1 In his spring statement in March, Sunak attempted to address cost-of-living concerns by raising National Insurance thresholds from July 2022.
As the new tax year starts, here is a reminder of the main tax exemptions and allowances, and what has – or hasn’t – changed for this year.