Now that we are into the new fiscal year, what does it mean for you as an individual or as a business owner? There are a few changes that have come in to effect for the 2018/2019 tax year that you might want to be aware of so I have put together this handy guide to highlight the key ones.
Get your water bottles ready,
because we’re in for a dry subject.
The rates for the National Minimum Wage (NMW) and the National Living Wage (NLW) change every April. The former applies for workers who are between school leaving age and 24. The latter is for workers aged 25 and over.
The rates from April 2018 will be as follows (the previous rate from April 2017 is in brackets):
- 25 years old and over £7.83 per hour (£7.50 per hour)
- 21 to 24 years old: £7.38 per hour (£7.05 per hour)
- 18 to 20 years old: £5.90 per hour (£5.60 per hour)
- Under 18 years old: £4.20 per hour (£4.05 per hour)
- Apprentices either under 19 years old or over 19 and in the first year of their apprenticeship: £3.70 per hour (£3.50 per hour)
- Your personal allowance is the amount you can earn before you pay income tax, and this has now been increased to £11,850 (from £11,500).
- The trigger level for the higher rate of tax (40%) has increased to £46,350 (from £45,000). This new figure also includes the increased personal allowance.
Auto-enrolment pension contributions
- Auto-enrolment pension contribution rates have risen for 2018/2019. The new levels are 3% from employees (previously 1%) and 2% from the employer (previously 1%).
- The childcare voucher scheme is being replaced by Tax-Free Childcare, which the UK government started rolling out in April 2017 and is open to you if you’re self-employed (unlike the voucher scheme). You can only use one of the schemes.
- If you’re using the childcare voucher scheme (or plan to sign up to it as a new member before the October deadline), it will remain open to you as long as your employer continues to run it – and you stay with them, and you don’t take an unpaid career break that lasts more than a year. (I’m not sure if this last sentence reads very well, but it might just be me).
For further information, please review the UK Government website:
Remember the importance of rehydration….go and now enjoy a refreshing drink, you made it!