The beginning of the new tax year brings a range of changes to tax and business legislation. Some of the key measures we have outlined here for you to make note of.
The minimum wage is rising:
From 1 April 2019, the National Minimum Wage and the National Living Wage rates will rise.
Apprentices (Under 19 or in the first year of their apprenticeship): £3.90 NMW
16 and 17-year-olds: £4.35 NMW
18-20-year-olds: £6.15 NMW
21-24-year-olds: £7.70 NMW
25 and over: £8.21 NLW
Further to this, in the 2019 Spring Statement, Chancellor Phillip Hammond announced that a review will be undertaken of the latest international evidence on the impact of minimum wages, to inform future NLW policy after 2020.
Alterations to income tax:
The income tax basic rate will rise to £37,500. Consequently, the threshold at which the 40% band applies is £50,000 for taxpayers who are entitled to the full personal allowance (PA). Individuals pay tax at 45% on their income over £150,000.
From April 2019, the PA will rise from £11,850 to £12,500. If you ‘adjusted net income’ exceeds £125,000 in 2019/20, there is no PA available.
However, income tax for those in Scotland is different to elsewhere in the UK. There are five income tax rates in Scotland, ranging from between 19% and 46%. The 41% band threshold will be £43,430 for those entitled to the full PA.
When looking at Wales, the Welsh government has the power to vary the rates of income tax payable Welsh taxpayers. The Welsh rate of income tax has been set at 10p, this will be added to the reduced rates. Meaning that the tax payable by Welsh taxpayers continues to be the same as that payable by English and Northern Irish taxpayers.
Changes to employer-provided cars:
With the maximum charge capped at 37% of the list price of a car, multiplied against the band of CO2 emissions, the percentage applied per band will increase by a further 3%.
Rising Residence Nil-Rate Band:
The inheritance tax Residence Nil-Rate Band (RNRB), will rise from £125,000 to £150,000 for the 2019/20 tax year. With a further increase to £175,000 in 2020/21. Thereafter it will rise in line with the Consumer Price Index.
Increase in compulsory employer pension contributions:
As part of the pensions auto-enrolment scheme, from 6 April 2019 employers will now be required to contribute at least 3% towards employees that qualify.
Alterations to the Gift Aid Small Donations Scheme:
The limit of applying to donations of £20 or less made by individuals in cash or contactless payment, will raise from 6 April 2019 to £30.
If you would like advice regarding any of the changes set to come in place from April 2019, as a experienced accountants based in the heart of Exeter. We are readily available by email, phone or come and see us to arrange an appointment. Click here to get in contact with us.