Pay packets to feel the pinch from income tax changes and new levies

PAY packets will be taking another hit this month as a series of income tax changes and new levies came into being for the new year.

Take-home pay will be reduced due to a narrowing of tax bands and a reduction in tax credits — meaning that more people will be paying tax at 41%, according to PwC senior tax manager Catherine Desmond.

Furthermore, the introduction of the Universal Social Charge (USC) and changes to how private pension contributions are taken from salaries will see further snips to spending power, according to Ms Desmond.