The Budget, what does it mean for businesses and the taxpayer?
Personal Allowance
The personal allowance threshold and the higher rate income tax threshold are both to increase from April 2019.
- The personal allowance threshold will rise from £11,850 to £12,500, when 20% income tax is paid. This will be maintained in 2020.
- The higher rate income tax threshold, for those paying 40% tax, will increase from £46,350 to £50,000.
National Insurance
The National Insurance (NI) threshold will also rise. NI is paid by those 16 years or over.
| Present | April 2019 | |
|---|---|---|
| No NI | £0 and £8,424 | £0 and £8,632 |
| 12% NI on this portion of income | Between £8,424 and £46,350 | Between £8,632 and £50,000 |
| 2% NI on this portion of income | Over £46,350 | Over £50,000 |
National Living & National Minimum Wage
The national living wage will increase by 4.9% and the national minimum wage from between 3.5% and 5.5% dependant on age.
| Current Level | From April 2019 | ||
|---|---|---|---|
| National Living Wage | Age 25 and over | £7.83 | £8.21 |
| National Minimum Wage | Age 21 to 24 | £7.38 | £7.70 |
| National Minimum Wage | Age 18 to 20 | £5.90 | £6.15 |
| National Minimum Wage | Age under 18 | £4.20 | £4.35 |
| National Minimum Wage | Apprentice | £3.70 | £3.90 |
Business
- Business rates bills for premises with a rateable value of £51,000 or less will be cut by 1/3 over 2 years. This will help 90% of independent shops, pubs and restaurants to cut bills by £8,000.
- The Annual Investment Allowance will increase from £200,000 to £1 million to assist businesses invest and grow from 1 January 2019 to 31 December 2020.
- From October 2018 businesses can deduct 2% of the cost of any new non-residential structures and buildings off their profits before they pay tax.
- From April 2019 large businesses will be able to invest up to 25% of their apprenticeship levy to support apprentices. With the apprenticeship levy reducing from 10% to 5% for small companies and the government paying the remaining 95%. Further details of this will be given in early 2019.
For further information regarding the 2018 Budget then go to http://bit.ly/BWBudget2018hmrc
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