Round-up of tax and legislation changes coming in today

A number of the government’s tax and legislation changes that come into effect from today, 6 April, will have an impact on benefits.

Phasing out of the default retirement age (DRA):

From 6 April, the removal of the DRA means employers will not be able to issue notifications for compulsory retirement using the DRA procedure. After 1 October employers will not be able to use the DRA to compulsorily retire employees.

Removal of requirement to annuitise by age 75:

From 6 April, the requirement to buy an annuity by age 75 will be removed and be replaced with the new capped and flexible drawdown regime.

National insurance (NI) increases by 1% for employers and employees:

For employees, the Class 1 NI main rate is going up from 11% to 12% and the upper rate from 1% to 2%. Employers NI is increasing from 12.8% to 13.8%.

Reduction of the annual allowance will be reduced to £50,000:

The annual allowance will be reduced from £255,000 in the 2010/11 tax year to £50,000 in the 2011/12 tax year.

Tax relief restriction on employer-supported childcare:

From 6 April, the weekly amount that parents joining an employer-supported childcare scheme will be able to claim exempt from income tax and disregarded of national insurance (NI) contributions will remain at £55 for basic-rate taxpayers but will be reduced to £28 and £22 per week for higher and additional-rate taxpayers, respectively. All current users will be unaffected.

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