It is hard to believe but we are now well on our way into a new tax year. And once again the associated raft of legislative payroll is affecting how we manage payroll for our customers.
The 2018-19 tax year means we need to know all the new payroll changes that have taken place since April 2018.
- The personal allowance has increased from £11,500 to £11,850 per year, making the standard tax code 1185L.
- The 20% basic rate tax band increases from £33,500 to £34,500 per year and 40% from £34,500 above.
- The lower earnings limit for National Insurance contributions increases from £113 per week to £116 per week or from £490 per month to £503 per month.
- The National Minimum Wage has increased:
- Employees between 16yrs and 17yrs minimum wage is £4.20
- Employees between 18yrs and 20yrs minimum wage is £5.90
- Employees between 21yrs and 24yrs minimum wage is £7.38
- Employees between 25yrs and over minimum wage is £7.83
- Statutory Sick Pay increases from £89.35 per week to £92.05 per week.
- Statutory Maternity, Adoption and Paternity Pay increases from £140.98 per week to £145.18 per week.
- Minimum Automatic Enrolment pension contributions increase from 1% to 2% for employers and from 1% to 3% for employees.
- Student loan thresholds increase to £18,330 for Plan 1 loans and to £25,000 for Plan 2 loans.
There are some other changes that are affecting cash equivalents of benefits in kind (BIK).
The current company car benefit in kind rates start at 19% for petrol and real driving emissions step 2(RDE2) complaint diesel cars rising 1% increments as CO2 band rises up to a maximum 37%. From 6th April 2018 the following changes have occurred:
- 4% diesel car tax supplement on all non-RDE2 compliant diesel models
- All hybrid cars receive a reduced BIK
- Electric Vehicles have a BIK rate of 13%.
For more information, contact us.
By Jazib Zaidi