The 5th of April has landed again but what has changed from tax year 2018/19? As your retail accountants in Gateshead, we would want to share the information below.
Personal tax allowances
Personal allowance has increased to £12,500 from £11,850. This means you will now earn £12,500 before paying income tax. This is an approximate saving of £130 per year.
The basic rate tax band has increased to £50,000 from £46,350. Therefore if you fall into this category you will be taxed at 20%.
Dividends in the basic rate band will be taxed at 7.5% and at 32.5% at the higher rate, as last year. With the dividend allowance of £2,000 also remaining untouched.
The tax free amount which can be paid into a personal pension remains at £40,000.
The Capital Gains Tax annual exempt amount has increased by £300 to £12,000.
National minimum and living wage increases
21 to 24
Corporation tax remains at 19% however the government plan to reduce this to 17% from tax year 20/21.
The Annual Investment Allowance (AIA) increased to £1million on 1 January 2019.
When you use a company vehicle for personal use this triggers a benefit n kind (BIK) tax charge.
- The BiK on company vans increases to £3,430 (from £3,350)
- The BiK on fuel for a van provided for personal use increases to £655 (from £633).
BIK charge for company cars in more complex. If you use a company vehicle for personal use you should speak to your accountant.
The tax free amount which you can put into an ISA each year will remain at £20,000. This includes Cash ISAs Stocks and Shares.
You are also eligible to invest £4,000 each year in a lifetime ISA (LISA) which can be used to fund your first home purchase. You get a 25% bonus each year on all funds which you invest.
Making tax digital
Last but not least Making Tax Digital (MTD) dropped on 1 April 2019. Businesses with turnover above the VAT threshold of £85,000 are now required to keep digital records and submit VAT returns to HMRC digitally.
Do you need for information about taxes? Find help from expert Newcastle business accountants. Also, call us at 01914937054.