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 1Plan 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.

Contact

Jake Lelliott
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