Posted on 5th March 2019 at 10:21
As usual, changes to tax codes and contributions to National Insurance and pensions come into force on 6 April 2019.
These are the most common changes which affect a lot of people, but there are others and you should seek expert advice if you feel your circumstances are different.
The tax-free allowance will be £12,500 per year which equates to £1042 a month or £240 a week.
Above that, tax is deducted at 20% up to a gross pay of £50,000 per year.
Above that, other rules apply.
The threshold at which National Insurance contributions are due are the same for the employee and employer at £8632 per year (so, £719 per month or £166 per week). The threshold is a slight increase on this year, so will mean a small saving for both you & your staff.
Above that an employee pays 12% and an employer pays 13.8% up to a gross pay of £50,000 per year.
Above that other rules apply.
But do also remember that Employers' NIC is NOT payable for an employee aged under 21. And there are special rules for apprentices too, so it might be worth checking the circumstances of individuals to be sure you or they are not overpaying.
If your spouse does not earn £12,500 per year, you may be able to transfer part of their tax-free allowance (up to £1,190) to you and thus earn more without paying tax. This is simple to do over the phone with HMRC - click here for more details.
Employer's Allowance Towards NIC
This has been in force for a couple of years now and for 2019/20 the allowance remains at £3,000 per employer. BUT the rule about sole directors also remains - if you are the only employee on your own payroll, you CANNOT claim this allowance.
THIS IS NOT AUTOMATICALLY APPLIED - REMEMBER TO TICK THE BOX ON YOUR PAYROLL SOFTWARE ON THE FIRST PAY RUN IN THE NEW TAX YEAR.
As always, we recommend that you speak to your accountant or tax adviser
who is qualified to be able to give you the best advice for your particular circumstances.