Tax changes for 2019/20
25th March 2019
David Bowie sang about not wanting to be a richer man in his 1972 hit Changes, but most people should have more money in their pockets once the 2019/20 tax year gets under way.
That follows Chancellor Philip Hammond’s choice to loosen the purse strings on the UK’s public finances when delivering his Budget speech back in October 2018.
From 6 April 2019, here are some of the headline measures to affect businesses and taxpayers.
Income tax rates and bands 2019/20
Hammond’s decision to raise the personal allowance – under which threshold people pay no income tax – from £11,850 to £12,500 was warmly received by taxpayers last autumn.
At the same time, higher-rate taxpayers also welcomed the prospect of the higher-rate threshold increasing from £46,350 to £50,000.
The personal allowance going up is expected to provide an annual boost in income of £130 for basic-rate taxpayers, while higher-rate taxpayers earning up to £100,000 should be £860 better off.
Maybe “the hard work of the British people is paying off in hard cash in their pockets,” as Hammond said back in October 2018.
Business rates 2019/20
All retailers in England with a rateable value of less than £51,000 will see their business rates bill reduced by a third.
That move is expected to provide 90% of independent shops, pubs, restaurants, and cafes – like those just up the road from us on North Street – with savings of up to £8,000 a year.
What’s more, these reduced business rates will remain in place until the next revaluation in two years’ time.
Workplace pensions increasing
If you are an employer, you need to be aware the minimum amount you pay into your employees’ workplace pensions is going up by 1% on 6 April 2019.
This applies to any staff who are earning more than £10,000 and are aged between 22 and state pension age.
You will need to provide at least 3% towards the workplace pensions of any employees who meet these criteria. At the same time, their minimum contributions rise to 5%.
National living wages rates 2019/20
The national living wage, which applies to most employees aged 25 and over, will increase from £7.83 to £8.21 from 1 April 2019.
For someone being paid the national living wage and working the average 37.5 hours a week, that takes their annual earnings past £16,000 for the very first time.
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