Much like any other “fresh start”, the new tax year can be a great time to delve into the detail of your financial situation. Speak to us at HL&W to take advantage of the opportunities that are now open to you in the new tax year.
We have shortlisted the more frequently asked about tax tables.
The new tax year 2018/19 begins on 6 April 2018 and we outline below some of the changes to tax and business legislation.
Hopefully, this helps but please call us if you have any queries around this.
Reduction in the Dividend Allowance
The Current Tax Free dividend allowance of £5,000 is set to reduce to £2,000 on 6 April 2018.
Increase in National Minimum Wage (NMW) and National Living Wage (NLW)
The following rates will apply from 1 April 2018:-
- The NLW for employees aged 25 and over will increase to £7.83 per hour
- Workers aged 21-24 £7.38 per hour
- Workers ages 18-20 £5.90 per hour
- Workers aged 16-17 £4.20 per hour
- Apprentices £3.70 per hour
Apprentices are entitled to the apprentice rate if they are either aged under 19 or aged 19 or over and in the first year of their apprenticeship.
Employers’ Auto Enrolment Contributions
From 6 April 2018 auto enrolment contribution rates will rise for employers. In the current 2017/18 year, the minimum pension contribution rate is 1% from the employer. In the tax year 2018/19 affected employers must pay a minimum of 2%.
Income Tax Rates and Allowances
*PA will be withdrawn at £1 for every £2 by which ‘adjusted income’ exceeds £100,000. There will therefore be no allowance given if adjusted income is £123,700 or more (2017/18: £123,000).
†10% of the PA (2018/19: £1,185; 2017/18: £1,150) can be transferred to a spouse or civil partner who is no more than a basic rate taxpayer, where both spouses were born after 5 April 1935.
§ If gross income exceeds it, the limit may be deducted instead of actual expenses.
BRB and additional rate threshold are increased by personal pension contributions (up to permitted limit) and Gift Aid donations.
General income (salary, pensions, business profits, rent) usually uses personal allowance, basic rate and higher rate bands before savings income (interest). To the extent that savings income falls in the first £5,000 of the basic rate band, it is taxed at nil rather than 20%.
Annual relievable pension inputs are the higher of earnings (capped at AA) or £3,600. The AA is usually reduced by £1 for every £2 by which relevant income exceeds £150,000, down to a minimum AA of £10,000. The AA can be reduced to £4,000, where certain pension drawings have been made.