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April 2019 Tax Changes in the UK - Both Personal and Business

Contributed by Sussex SEO
03 May, 2019


If you haven't yet had your paycheck for April 2019, you may not be aware of the changes coming to your pay in the new financial year. However, you may be pleasantly surprised by the incoming changes and how they impact the amount of money you or your business are now entitled to (after tax).

For that reason, here is a breakdown of all of the tax changes happening in April 2019 and how they may affect you or your business in 2019.

Personal Tax

There are a lot of changes when it comes to personal tax this year, which covers a range of areas such as Personal Allowance, dividend allowance, national minimum wage, student loan allowances and company cars. The breadth of changes is quite wide and so keeping track - and understanding - all of it may turn out to be more difficult than expected.

Personal Allowance

The personal allowance is the amount of money which you can earn until you have to pay tax on your income. This is increasing in 2019 - from GBP11,850 to GBP12,500. For most people, this means a slight reduction in the amount of tax which they will pay this year (likely around GBP130 for those on an average wage).

Dividend Allowance

The dividend allowance has not changed in 2019 - it remains at GBP2,000. But, the increased personal allowance means that you can take more dividends before actually having to pay a higher rate.

Company Cars

One increase that may be less welcome is that on company cars. This year, benefit in kind tax will increase on the listed price of the car, but this year it will also be based on the cars CO2 emissions. So, it pays to be more environmentally conscious when it comes to your company vehicle if you have one.

Student Loans

Another benefit to this years tax changes includes an increase in your student loan allowance threshold (until you have to make payments back). The new limit is as follows:

Plan 1 - GBP18,935 (risen from GBP18,330)

Plan 2 - GBP25,725 (risen from GBP25,000)

This is applicable to all current or future students who pay their student loan back via employer deductions.

Corporation Tax

As many changes are occurring to personal tax, it is almost inevitable that the same level of changes are also happening on a corporate level. Corporate tax overall is frozen at 19% (though there are plans to decrease this to 17% in the next financial year in 2020). But, there

are some changes when it comes to things such as workplace pensions and investments which are vital to know, as well as business rates.

Pension

The workplace pension is changing in 2019 and this will affect the way auto-enrolment contributions change. The minimum contribution will rise from 5% to 8%, meaning that the employer minimum contribution has to be either 2% or 3% - with the employee making up the rest at a higher rate as well.

AIA

The Annual Investment Allowance, which includes items such as machinery, will increase to GBP1 for the 2019-2020 financial year.

Business Rates

In 2019, there will be changes introduced to current Business Rates in order to bolster the struggling High Street. A discount will be provided in a Retail Discount scheme, meaning retail companies with a value of GBP51,000 or less will pay less. This is being done in order to promote staff retention and even give shops a chance to hire more staff.

For more information on your business rates, you may need the advice of a commercial property management team, especially if you want more information on how to get business rates relief.

Final Thoughts

On the whole, 2019 in the UK is proving to be a big year of change for tax. With more change marked for 2020 in terms of business. Understanding and being aware of these changes, then, is vitally important in order for you to know exactly how these changes will affect your take-home pay for the new financial year.



 


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