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New Tax Year – What Does This Mean For Me?

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

Source: HMRC/CIPP

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