THE BUDGET 2018
As you are all aware Chancellor Philip Hammond released the budget on Monday 29th October. We have detailed below the changes that us at Your Tax Shop have discussed over the past week, we believe that these are the changes that will affect our clients the most.
Most individuals will pay less tax from April 2019, these changes were supposed to come in during April 2020, but they have brought it forward a year.
The personal tax allowance will be raised from £11,850 to £12,500, while the threshold at which you start paying higher rate tax will be raised from £46,350 to £50,000.
National Insurance thresholds will rise in April 2019, this will benefit most individuals unless you are a high earner.
You will pay no national insurance on income between £0 and £8,632, this has increased from £8,424. You will pay 12% national insurance on income between £8,632 and £50,024. You then pay an additional 2% national insurance on any income over £50,024.
So, to summarise, if you are a high earner you will pay an additional 10% of your earnings between £46,834 and £50,024 on national insurance. But this will be offset against the additional tax relief you’ll receive during 2019/20.
The national living wage for over 25- year olds will rise from £7.83 per hour to £8.21 per hour. The 38p increase represents a 4.9% rise, it amounts to an annual increase of around £690 for a full-time worker.
The annual ISA allowance will remain at £20,000 in 2019/20.
The £20,000 limit is for adults, the annual allowance for Junior ISAs will go up in line with inflation to £4,368.
The employment allowance will remain at £3,000 for the 2019/20 tax year. But they have announced that from April 2020, this will be restricted to employers with an employer NI bill below £100,000.
Stamp duty relief has been extended to ‘shared ownership’ properties on the first £300,000 of those valued at up to £500,000. If you’re a first-time buyer in England or Northern Ireland and purchase a shared ownership property up to this value, you’ll now pay zero stamp duty on the first £300,000. This change comes into effect immediately.
Should you require any further information regarding the above, please contact one of us at Your Tax Shop and we will be happy to help!