Next week (6th April 2019) New Tax Rates and Minimum Wage Rates come into effect for 2019-2020.
Please be aware that as an employer, you will need to make changes to any minimum wage rates, and Income tax payments. The changes are as follows:
Personal Income tax bands and rates
The bands and rates at which people in England, Northern Ireland, Wales pay income tax will change for 2019/20, but it will be business as usual for taxpayers in Scotland.
The following income tax bands and thresholds will be in place from 6 April 2019:
Table 1: England, Northern Ireland & Wales Band Taxable income 2019/20 Rate Personal allowance:
Up to £12,500 = 0%
Basic rate
£12,501 to £37,500 = 20%
Higher rate*
£37,501 to £150,000 = 40%
Additional rate*
Above £150,000 = 45%
Tax on dividends (throughout the UK) Dividend allowance = £2,000
Basic rate = 7.5%
Higher rate = 32.5%
Additional rate = 38.1%
ISAs
The £20,000 limit may also be used to invest in a lifetime ISA, which has a maximum allowance in 2019/20 of £4,000.
Pensions
The lifetime allowance, which is the maximum amount an individual can draw from pensions without incurring extra tax charges, rises to £1.055 million from 6 April 2019.
Auto-enrolment
From 6 April 2019, the minimum employer contribution towards an employee’s workplace pension will increase from 2% to 3%, while eligible employees will see their minimum contributions increase from 3% to 5% of their pensionable earnings.
These contributions are mandatory for workers aged between 22 and state pension age, earning more than £10,000 a year.
National living wage rates
National living wage rates for all ages and apprentices are increasing from 1 April 2019.
2019/20 rates
Over-25s – £8.21
21 to 24 – £7.70
18 to 20 – £6.15
Under-18s – £4.35
Apprentice – £3.90*
*If under 19 or in the first year of apprenticeship
Metis HR is a professional HR Consultancy based in the North West of England supporting clients across the country. We specialise in providing outsourced HR services to small and medium-sized businesses. Call us now on 01706 565332 to discuss how we may help you.
