New tax year, new allowances
While the 6th of April may be just another Saturday to most people, it marks the start of a new UK tax year. On the most part, this means higher minimum wages and higher allowances!
Below is a short summary of some of the changes that are most likely to impact employees, the self-employed and business owners (Rates may not be applicable in Scotland):
National Living Wage and Minimum Wage
From 1st April 2019 National minimum wage will increase by the following:
- 4.9% from £7.83 – £8.21 for those 25 and over
- 4.3% from £7.38 – £7.70 (21-24)
- 4.2% from £5.90 – £6.15 (18-20)
- 3.6% from £4.20 – £4.35 (16 -17)
- 5.4% from £3.70 – £3.90 (Apprentices)
Personal Allowance
Essentially your general-purpose allowance for tax-free income is increasing from £11,850 to £12,500, saving basic-rate taxpayers £130.
The Basic Rate Band
An increase from £34,500 to £37,500 means that higher-rate taxpayers will pay the lower rates of tax on an extra £3,000 of income.
Student Loan
New thresholds before you start repayments:
| Plan 1 | Plan 2 (Loans on or after 01/09/2012) | |
| 2019/20 | £18,935 | £25,725 |
| 2018/19 | £18,330 | £25,000 |
National insurance
Class 1 NIC (Employees and employers start paying NIC): On earnings over £719p/m at 12%
Class 2 NIC (Flat rate for self-employed with earnings over £6,365): £3.00p/w
Class 4 NIC (Self-employed start paying Class 4 NIC): On earnings over £8,632p/a at 9%
Allowances remaining unchanged
Corporation Tax: 19%
VAT threshold: £85,000
Income limit to retain 100% of Personal Allowance: £100,000
Additional Rate threshold: £150,000
If you would like any further guidance on how the new tax year might affect you, feel free to get in touch.
The word accounting comes from the word accountability. If you are going to be rich, you need to be accountable for your money.
Robert Kiyosaki
