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With the commencement of 2019/20 tax year on 6th April 2019, it is important to be familiar with the amendments that will be applicable from April 2019. The article highlights the main amendments affecting businesses and individuals.

This article provides information on:

  • Business rates relief
  • Corporation tax, allowances and workplace pensions
  • Company cars, vehicle and fuel benefit
  • Income tax
  • National Minimum Wage and National Living Wage rates
  • Other personal tax reliefs and allowances
  • Personal Tax and allowances
  • Tax on shopping and services
  • Student Loans

April Tax Changes 2019: Changes For You

National Living Wage

The National Living Wage increased to £8.21 per hour. If an individual is aged 25 and more, and he/she is not in the initial first year of an apprenticeship, then the person is lawfully eligible to receive the National Living Wage. Individuals below 25 years of age and apprentices also get advantage from increasing Minimum Wage. The National Minimum Wage and National Living Wage rates are applicable all through the United Kingdom. The hourly proportion for the minimum wage is determined by the age of an individual, and whether he/she is an apprentice. An individual must be at least:

  • School leaving age in order to receive the National Minimum Wage
    • In England, an individual can leave school on the last Friday in the month of June if a person will be 16, by the completion of the summer holidays

      • Until an individual is 18 years of age, he/she should either stay in full-time education or spend minimum 20 hours a week volunteering/working or start traineeship/apprenticeship
    • In Scotland, if an individual turn 16 years of age between 1 March and 30 September then he/she can leave school post 31st May of that year
    • In Wales, an individual can leave school on the last Friday in the month of June, if a person will be 16 by the completion of the summer holidays
    • In Northern Ireland, if an individual turns 16 during the school year (i.e. starting from 1 September until 1 July), he/she can leave school post 30th June
  • Aged 25 in order to receive National Living Wage – the minimum wage will still be applicable for employees aged 24 and below

Current Rates

Below mentioned are the new rates for the National Minimum Wage and the National Living Wage – typically, these rates are altered every April

Year Age 25 and above Age between 21 and 24 Age between 18 and 20 Age below 18 Apprentice
April 2019 £8.21 £7.70 £6.15 £4.35 £3.90

Previous Rates

Below mentioned are the rates from April 2016 until March 2019

Year Age 25 and above Age between 21 and 24 Age between 18 and 20 Age below 18 Apprentice
During April 2018 and March 2019 £7.83 £7.38 £5.90 £4.20 £3.70
During April 2017 and March 2018 £7.50 £7.05 £5.60 £4.05 £3.50
During October 2016 and March 2017 £7.20 £6.95 £5.55 £4.00 £3.40
During April 2016 and September 2016 £7.20 £6.70 £5.30 £3.87 £3.30

Fuel Duty – Tax on Shopping and Services

Fuel Duty is encompassed in the price paid for diesel, petrol, and other fuels used in vehicles or for heating. UK citizens also pay typical rate Value Added Tax at 20% on most fuel, or the abridged rate of 5% for local heating fuel. The price paid for the fuel depends on the category of fuel

Category of fuel Price
Biodiesel, diesel, petrol, and bioethanol 57.95 pence for every litre
Liquefied petroleum gas (LPG) 31.61 pence for every kg
Natural gas as fuel in automobiles, for instance, biogas 24.70 pence for every kg
‘Fuel oil’ burned in a blast furnace or for the purpose of heating 10.70 pence for every litre

Personal Tax, Allowances and Thresholds

The amount earned by an individual prior to paying Income Tax is referred to as Personal Allowance. Beginning 6th April 2019, the Personal Allowance has been increases to £12,500 (from the previous £11,850) – the increase will result to a minor reduction in tax of £130 for each year for most people in the United Kingdom. The threshold for Higher Rate of income tax (i.e. 40%) has been increase to £50,000 (from the previous £46,350)

In order to make the most of tax efficacy, as a company Shareholder and Director, an organisation must pay wages of £8,632 and dividends to a maximum of £41,368 in the tax year 2019/20 – this assumes that there is no additional income and hence, the over-all personal tax bill will be equivalent to £2,662.50. If any amount, in excess of the amount mentioned, is taken as salary and dividends, then an individual will have to pay tax on the dividends at 32.5%

Scottish Income Tax

The Scottish Budget was pronouncement in Dec-18, and it announced a series of modifications for the tax year 2019/20 comprising of new bands and thresholds

Band name Tax Rate Bands and Thresholds
Tax Year 2018/19 Tax Year 2019/20
Beginner rate 19% Between £11,850 and £13,850 Between £12,500 and £14,549
Basic rate 20% Between £13,851 and £24,000 Between £14,550 and £24,944
Intermediary rate 21% Between £24,001 and £44,273 Between £24,945 and £43,430
Higher rate 41% Between £44,274 and £150,000 Between £43,431 and £150,000
Supplementary rate 46% More than £150,000 More than £150,000

Dividend Allowance

For 2019/20 tax year, the Dividend Allowance remains at £2,000. However, as stated above, the augmented tax thresholds mean that an individual can take more in dividends prior to paying the higher dividend tax rate

Company Vans, Company Cars, and Fuel Benefits

Starting 6th April 2019, tax rates pertaining to ‘benefit in kind’ (BiK) are augmented for company cars. The fraction applied to the list price of a car will upsurge based on the CO2 emissions printed by the Vehicle Certification Agency (VCA). HMRC provides a ready reckoner of appropriate percentage for calculating car benefit charge.

CO2 emissions in grams per kilometre Appropriate Percentage (Electric & Petrol Vehicles)
2018-19 2019-20
1-50 13% 16%
51-75 16% 19%
76-94 19% 22%
95-99 20% 23%
100-104 21% 24%
105-109 22% 25%
110-114 23% 26%
115-119 24% 27%
120-124 25% 28%
125-129 26% 29%
130-134 27% 30%
135-139 28% 31%
140-144 29% 32%
145-149 30% 33%
150-154 31% 34%
155-159 32% 35%
160-164 33% 36%
165-169 34% 37%
170-174 35% 37%
175-179 36% 37%
180-184 37% 37%
185-189 37% 37%
190-194 37% 37%
195-199 37% 37%
200-204 37% 37%
205-209 37% 37%
210-214 37% 37%
215 or above 37% 37%

Company Cars and Vans

The tax paid on such reimbursements has been increased from 6th April 2019. The ‘benefits in kind’ is a fixed amount and for employees and directors, the changes are as follows:

  • ‘Benefit in kind’ on company vans has increased to £3,430, from the previous £3,350
  • ‘Benefit in kind’ on fuel for a van made available to an employee for personal use upsurges to £655, from the previous £633

Business Rates Relief

An individual can receive small business rate relief if:

  • The rateable value of a property is not more than £15,000
  • Only one property is used by the business

An individual will not be required to pay business rates if a property’s rateable value is £12,000 or less. For properties having rateable value of £12,001 to £15,000, the relief rate will go down progressively from 100% to 0%. For instance, if the rateable value is £13,500, an individual will receive 50% off on the bill. If rateable value is £14,000, he/she will get 33% off

Student Loans

Beginning 6th April 2019, the Department for Education has revised the earnings threshold before a student can start to pay back a student loan:

  • Plan 1 loans increased to £18,935, from the previous £18,330
  • Plan 2 loans increased to £25,725, from the previous £25,000

From 1 April 2019 to 31 March 2020, the multiplier for small business is 49.1p and the standard multiplier is 50.4p. The multipliers may vary in the City of London

Personal Pensions

The tax-free amount an individual can pay into his/her own pension remains at £40,000 for 2019/20 tax year. However, the lifetime allowance for pension savings increased to £1,055,000. From the previous £1,030,000

Corporation Tax

Corporation Tax to be paid on business earnings stays at 19%. The government is working towards decreasing this to 17% for the 2020/21 tax year (i.e. beginning 6th April 2020)

Workplace Pensions (auto-enrolment)

The minimum amount that a business is required to pay into an employee’s auto-enrolment workplace pension increased beginning 6th April 2019

Date effective Total minimum contribution Employer minimum contribution Staff contribute the remainder
Previous rate 5% 2% Up to 3%
For 2019/20 tax year – 6th April 2019 8% 3% Up to 5%

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