The 5th of April has landed again but what has changed from tax year 2018/19?
Personal tax allowances
Personal allowance has increased to £12,500 from £11,850. This means you will now earn £12,500 before paying income tax. This is an approximate saving of £130 per year.
The basic rate tax band has increased to £50,000 from £46,350. Therefore if you fall into this category you will be taxed at 20%.
Dividends in the basic rate band will be taxed at 7.5% and at 32.5% at the higher rate, as last year. With the dividend allowance of £2,000 also remaining untouched.
The tax free amount which can be paid into a personal pension remains at £40,000.
The Capital Gains Tax annual exempt amount has increased by £300 to £12,000.
National minimum and living wage increases
|Year||25 years +||21 to 24 years||18 to 20 years||Under 18 years||Apprentice|
|1st April 2019||£8.21||£7.70||£6.15||£4.35||£3.90|
Corporation tax remains at 19% however the government plan to reduce this to 17% from tax year 20/21.
The Annual Investment Allowance (AIA) increased to £1million on 1 January 2019.
When you use a company vehicle for personal use this triggers a benefit n kind (BIK) tax charge.
- The BiK on company vans increases to £3,430 (from £3,350)
- The BiK on fuel for a van provided for personal use increases to £655 (from £633).
BIK charge for company cars in more complex. If you use a company vehicle for personal use you should speak to your accountant.
The tax free amount which you can put into an ISA each year will remain at £20,000. This includes Cash ISAs Stocks and Shares.
You are also eligible to invest £4,000 each year in a lifetime ISA (LISA) which can be used to fund your first home purchase. You get a 25% bonus each year on all funds which you invest.
Making tax digital
Last but not least Making Tax Digital (MTD) dropped on 1 April 2019. Businesses with turnover above the VAT threshold of £85,000 are now required to keep digital records and submit VAT returns to HMRC digitally.