It’s 6th April 2018 and the start of a shiny new tax year. So what does this mean for you as a Sole Trader or Employer?
New Tax Year – Sole Trader Changes
- Personal Allowance has increased by £350 to £11,850 per annum
- Basic Rate Income Tax Band has increased by £1000 to £34,500 per annum
- If you live and work in Scotland or work in the UK and your home address is in Scotland , there are now seven new tax bands:
| Band | Taxable income | Scottish tax rate |
|---|---|---|
| Personal Allowance | Up to £11,850 | 0% |
| Starter rate | £11,850 to £13,850 | 19% |
| Basic rate | £13,851 to £24,000 | 20% |
| Intermediate rate | £24,001 to £43,430 | 21% |
| Higher rate | £43,431 to £150,000 | 41% |
| Top rate | over £150,000 | 46% |
- New National Insurance Thresholds:
| Class 1 National Insurance thresholds | 2018 to 2019 |
|---|---|
| LEL | £116 per week £503 per month £6,032 per year |
| Primary Threshold (PT) | £162 per week £702 per month £8,424 per year |
| Secondary Threshold (ST) | £162 per week £702 per month £8,424 per year |
| Upper Secondary Threshold (under 21) (UST) | £892 per week £3,863 per month £46,350 per year |
| Apprentice Upper Secondary Threshold (apprentice under 25) (AUST) | £892 per week £3,863 per month £46,350 per year |
| Upper Earnings Limit (UEL) | £892 per week £3,863 per month £46,350 per year |
New Tax Year – Employer Changes
Along with changes to the Income Tax Bands and National Insurance Thresholds, there are a few other changes for employers:
- Increase in National Minimum and Living Wage:
| Category of worker | Hourly rate |
|---|---|
| Aged 25 and above (national living wage rate) | £7.83 |
| Aged 21 to 24 inclusive | £7.38 |
| Aged 18 to 20 inclusive | £5.90 |
| Aged under 18 (but above compulsory school leaving age) | £4.20 |
| Apprentices aged under 19 | £3.70 |
| Apprentices aged 19 and over, but in the first year of their apprenticeship | £3.70 |
- Auto Enrolment Thresholds Increased
- Lower Qualifying Earnings Start Point increase by £156 to £6,032 per annum
- Upper Qualifying Earnings Limit has increased by £1,350 to £46,350 per annum
- Qualifying Earnings Level has increased by £3 to £116 per week
- Pension Lifetime Allowance has increase fro £1 million to £1.3 million
- Pension Minimum Contribution Rates increased to 2% for employers and 3% for employees (total of 5% minimum)
- Statutory Payment Rates Increase:
- SMP, SAP, SPP, SHPP – increase of £4.20 to £145.18 per week
- SSP – increase of £2.70 to £92.05 per week
- Student Loan Earnings Threshold increased:
- Plan 1 increased by £555 to £18,330 per annum
- Plan 2 increased by £4,000 to £25,000 per annum
- New Mileage Allowance for Company Cars provided to Employees:
| Engine size | Petrol – amount per mile | LPG – amount per mile |
|---|---|---|
| 1400cc or less | 11 pence | 7 pence |
| 1401cc to 2000cc | 14 pence | 8 pence |
| Over 2000cc | 22 pence | 13 pence |
| Engine size | Diesel – amount per mile |
|---|---|
| 1600cc or less | 9 pence |
| 1601cc to 2000cc | 11 pence |
| Over 2000cc | 13 pence |
- Company Car Rates have increased:
| CO2 Emissions | 2018/19 |
|---|---|
| 0-50g/km | 13% |
| 51-75g/km | 16% |
| 76-94g/km | 19% |
| Each additional 5g/km (Up to 180g/km for year) | +1% |
| Diesel Supplement | +4% |
| Van Benefit Charge | £3,350 per annum |
- Fuel Scale Charge has increased:
- Cars increase of £800 to £23,400 per annum
- Van increase of £23 to £633 per annum
More information can be found on the HMRC website
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