• April 9, 2019

Tax 2019 – how the changes affect you and your business

Tax 2019 – how the changes affect you and your business

Tax 2019 – how the changes affect you and your business 150 150 tom

Every year the tax rates in the UK change. This year, on the 5th April, the tax year ended and with it came new modifications. If you’re a business owner it can be hard to keep up-to-date with the changes. To help, we’ve highlighted the important ones that will likely affect you and your business.

Personal Tax Rates
18/19 19/20
Personal Allowance – tax-free income amount 11,850 12,500
The income limit for Personal allowance – when you earn above this amount your eligibility for the personal allowance reduces.

For each £2 over you lose £1 of a personal allowance

100,000 100,000
Income Tax Rates
18/19 19/20
Basic Rate – earnings between £12,501 and £50,000 (19/20) 20 % 20 %
Higher Rate earnings between £50,001 and £150,000 (19/20) 40 % 40 %
Additional Rate on earnings above £150,000 (19/20) 45 % 45 %
Dividend Tax Rates
  • Dividend allowance – £2,000
  • Basic – rate tax of £7.5%
  • Higher – rate tax of 32.5%
  • Additional – rate tax of 38.1%
Employee National Insurance
18/19 – Annually 19/20 – Annually
Lower Earnings Limit (LEL) – below this incur no NICs £6,032 £6,136
Primary Threshold (PT) – below this incur no NICs £8,424 £8,632
Upper Earnings Limit (UEL)– earnings between the PT and UE will be taxed at 12 % £46,350 £50,000

Any earnings above the UEL are taxed at 2%

Employer National Insurance
18/19 19/20
Secondary Threshold £8,424 £8,632
ISA Savings Limit

ISAs are savings accounts where you don’t pay tax on the interest or gains made. The maximum amount you can save is £20,000 for 2019/20.

Self Employed National Insurance Contributions

National Insurance liability.

2018/19 2019/20
Small profits threshold – Earnings below this threshold incur no NICs. £6,205 £6,365
Class 2 NICs – for those earning above the Small profits threshold £2.95 per week £3.00 per week
Lower Profits Limit – Earnings up to this limit incur only Class 2 NICs. Over this limit incurs Class 4 NICs. £8,424 £8,632
Upper Profits Limit – Earnings up to this limit incur:

Class 2 NICs

Class 4 NICs at 9% of the profit between the Lower Profits Limit and Upper Profits Limit.

£46,350 £50,000
Earnings above the Upper Profits Limit

Any earnings above this limit incur:

Class 2 NICs

Class 4 NICs at 9% of the profit between the Lower Profits Limit and Upper Profits Limit

Class 4 NICs at 2% of the profit above the Upper Profits Limit.

Over £46,350 Over £50,000
Capital Gains Tax

Annual exemptions from Capital gains rises from £11,700 to £12,000 for 2019/20.

2018/19 2019/20
As a basic rate taxpayer Gains from other residential property 18% 18%
Gains from other chargeable assets 10% 10%
As a higher rate taxpayer Gains from other residential property 28% 28%
Gains from other chargeable assets 20% 20%
Entrepreneurs’ Relief (the lifetime limit on relief is £10 million)
Corporation Tax

The corporation tax rate remains at 19% for the year 2019/20

VAT Registration threshold

The VAT Registration threshold is the level of revenue at which you must register for VAT. It remains at £85,000 for 2019/20

General VAT rates

The standard rate of VAT remains at 20% for the year 2019/20

The reduced rate of VAT remains at 5% for the year 2019/20

Whether you’re an employee or a small business owner, it’s important to note the tax thresholds for the year so that you can make effective use of all of your allowances. If you still have questions about the changes affect you and your business, get in touch.

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