New tax year: the winners and losers

By Jennifer Hill, Personal Finance Correspondent

LONDON (Reuters) - Sunday marked the start of a new tax year with a string of sweeping changes -- to income tax, capital gains tax, individual savings accounts and tax on wealthy foreigners.

Low and middle-income earners, employees with large gains on shares and non-domiciled residents are among those who stand to lose out following the April 6 rule changes, while families with children, pensioners, and owners of second homes and buy-to-let property could benefit.

Leonie Kerswill, a tax partner at accountant PricewaterhouseCoopers, says: "Many people will have forgotten what changes are afoot and most will not have worked out how they are affected -- so the month-end payslips could bring a few surprises."

Here is a summary of the changes -- announced in the Budget in March 2007 -- and the winners and losers:

* Income tax and National Insurance contributions

The basic rate of income tax has been cut to 20 percent from 22 percent, while the 10 percent starting rate has been abolished.

National Insurance contribution (NIC) levels have also been altered. The earnings ceiling at which the 11 percent rate falls to 1 percent has been raised to 770 pounds from 670 pounds per week.

Collectively, these moves will hit low- and middle-income earners.