HMRC benefits and allowances remain unchanged in April

Starting in April, some benefits and tax allowances will not increase, while others will rise. Chancellor Rachel Reeves announced a 1.7% increase in various benefits in her autumn Budget. This change will start on April 6 and will help many households. The rise includes working age benefits like Universal Credit and Personal Independence Payment (PIP). The basic and new State Pensions will also go up by 4.1%. Additionally, the National Minimum Wage will increase by 6.7% to £12.21 per hour, and the weekly earnings limit for Carer’s Allowance will see its largest increase ever. However, not everything will increase. Some allowances set by HMRC will remain unchanged. The Personal Allowance, which is the income level before tax kicks in, will stay at £12,570. The higher income tax band of £50,270 will also be frozen for the next tax year. Tax Credits will end on April 5, 2025. They are being replaced by Universal Credit. Those eligible should have received a letter from the Department for Work and Pensions with details on how to transition. Employers with a combined pay bill over £3 million must pay an Apprenticeship Levy, which will remain frozen at £15,000 in 2025/26.