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New tax laws 'hit Brits in pocket'

Changes to income tax and other taxes might have negative financial effects on some Britons, the Guardian reports.

At the beginning of the new tax year on Sunday, the basic rate of income tax will be reduced from 22 per cent to 20 per cent.

Alongside this change, the 10 per cent tax rate for low-income workers will also be dropped.

David Kuo, head of personal finance at Fool.co.uk, advised: "Workers earning less than £10,000 will pay an extra £100 a year in income tax and National Insurance next year [due to the rate being scrapped], although they should be able to recoup the increase through means-tested benefits such as the working tax credit and child tax credits."

At the other end of the scale, Britons who play the stock market are also to feel the effects of reforms to capital gains tax.

The levy, made when shares are sold, was previously charged at 40 per cent of gains exceeding £9,200 - with added 'taper relief' meaning that a smaller proportion of total gains were taxable over time.

Under the new rules, the tax drops to 18 per cent of gains above £9,600 - with taper relief abolished.

The abolition of this relief can lead to people who sell shares paying significantly more in tax.

For example, the newspaper calculated that those making a £20,000 gain on stocks held for ten years pay £752 more in tax when they cash them in.

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