Changes for the 2019/2020 Tax Year

Personal Tax

The amount that an individual can earn before paying income tax increases on 6 April 2019 to £12,500 (from £11,850). The threshold for higher rate income tax (40%) increases to £50,000 (from £46,350).

The Dividend Allowance for 2019/2020 remains at £2,000, following the reduction on 6 April 2018.

National Minimum Wage

From 1 April 2019, the National Minimum Wages changes to the following amounts, dependent upon the employee’s age:

  • Apprentice - £3.90 (previously £3.70)

  • Under 18 - £4.35 (previously £4.20)

  • 18-20 - £6.15 (previously £5.90)

  • 21-24 - £7.70 (previously £7.38)

  • 25+ - £8.21 (previously £7.83)

Capital Gains Tax

The annual exemption for Capital Gains Tax increases from £11,700 to £12,000 for the 2019/2020 tax year.

Entrepreneurs’ Relief - from 6 April 2019, the minimum period through which an individual must meet the qualifying conditions for Entrepreneurs Relief increases from 12 months to 24 months.

Pension Relief

The annual allowance for payments into personal pensions remains at £40,000 per tax year, and the lifetime allowance for pension savings increases to £1,055,000 on 6 April (previously £1,030,000).

Student Loans

From 6 April 2019, the earnings threshold for Plan 1 loans will increase to £18,935 (previously £18,330) and Plan 2 loans will increase to £25,725 (previously £25,000).

Corporation Tax

The rate of Corporation Tax for all businesses remains at 19%, with plans to reduce this rate to 17% from 6 April 2020 onwards.

The Annual Investment Allowance for Companies investing in plant and machinery increases to £1 million between 1 January 2019 and 31 December 2020.

Auto-Enrolment

The minimum contributions for workplace pensions increases from 6 April 2019, meaning that the total contribution from employers and employees must be at least 8% of the employee’s qualifying earnings.

The minimum Employer Contribution increases to 3% from 6 April 2019 and therefore staff must contribute the remaining 5%.

Making Tax Digital (MTD)

Since 2015, HMRC have been introducing proposals for changes to the way in which information from businesses and property income is submitted to HMRC by way of a Digital Tax Account.

The introduction of the Digital Tax Accounts for taxpayers means that you can see the information that HMRC holds from employers, banks, building societies and other government departments and you are able to check them to ensure that the details are correct and complete.

Spring Budget 2017

Personal – Income Tax

  • Confirmed that the tax-free personal allowance will rise to £11,500 in April 2017
  • Threshold at which people pay 40% income tax will rise from its current level of £43,000 to £45,000 in April 2017.
  • The government has already announced that Class 2 NICs will be abolished from 6 April 2018, but will rise to £148.20 from April 2017 and will continue to be collected via Self-Assessment.