The new tax year 2018/19 starts on 6 April 2018 and we outline below some of the changes to tax and business legislation.
Reduction in the Dividend Allowance
The Current Tax Free dividend allowance of £5,000 is set to reduce to £2,000 on 6 April 2018.
Increase in National Minimum Wage (NMW) and National Living Wage (NLW)
The following rates will apply from 1 April 2018:-
Workers aged 21-24 £7.38 per hour
Workers ages 18-20 £5.90 per hour
Workers aged 16-17 £4.20 per hour
Apprentices £3.70 per hour
Apprentices are entitled to the apprentice rate if they are either aged under 19 or aged 19 or over and in the first year of their apprenticeship.
The NLW for employees aged 25 and over will increase to £7.83 per hour.
Employers’ Auto Enrolment Contributions
From 6 April 2018 auto enrolment contribution rates will rise for employers. In the current 2017/18 year, the minimum pension contribution rate is 1% from the employer.
In the tax year 2018/19 affected employers must pay a minimum of 2%.
From 6 April 2018 the tax treatment of employee termination payments changes in that all payments in lieu of notice (PILONs) are treated as earnings and taxed accordingly (whether they are contractual or not). In the past where there was no PILON clause in the employment contract, the payment could be treated as breach of contract and payments up to £30,000 could be tax free.