National Living Wage Rise
The national living wage has increased from April 2018, therefore employers need to make sure that they are up to date with the current rates.
The rate applicable will depend on the worker’s age and if they are an apprentice. If HMRC find the employer has not paid they will send them a notice for the arrears plus a fine for not paying the minimum wage.
Personal Allowance on the up
We all have a ‘personal allowance’ which denotes the amount we can earn without paying any income tax. If you earn more than your personal allowance, then you pay tax at the applicable rate on all earnings above the personal allowance, but the allowance itself will remain untaxed.
From April 2018, workers who have auto-enrolment pensions will have to pay more into this, with monthly contributions rising from a minimum of one per cent to a minimum of three per cent.
Student Loan tweaks
There are two types within the Student Loan Plan.
The annual threshold for the year 2018-19 is £18,330 as opposed to £17,775 for 2017-18.
You will have to start repaying your student loan once your income exceeds the £25,000 threshold. Previous threshold was £21,000.
The first £5000 of the dividend allowance in 2017/18 was tax free. This has changed from 06 April 2018, where the tax free dividend allowance has been reduced to £2000. Any dividends received above the allowance are taxed at the following rates:
7.5% for basic rate taxpayers
32.5% for higher rate taxpayers
38.1% for additional rate taxpayers