Employers: make sure you are up to date with key changes coming in the new Tax Year!

Changes are afoot! Annual changes to the National Minimum and Living Wages, Personal Tax Allowances, and Maternity and Paternity Pay are coming in April 2019.  For all employers it’s time to get up to speed with what these changes will mean for you and your employees.

National Minimum Wage and National Living Wage

The National Minimum Wage and National Living Wage rates will increase on 1 April 2019. The rate depends on the employee’s age and whether they are an apprentice (if they are under 19 or in the first year of their apprenticeship, otherwise refer to age bands). The 2018 rates together with the rates as of April 2019 are detailed below:

Year                     25 and over        21 to 24                18 to 20                Under 18              Apprentice

April 2018           £7.83                  £7.38                   £5.90                     £4.20                   £3.70

April 2019            £8.21                  £7.70                  £6.15                      £4.35                   £3.90

Further information on the National Minimum and Living Wages can be found on the gov.uk website: www.gov.uk/national-minimum-wage-rates

REMEMBER: if you have employees who are in receipt of Childcare Vouchers, they cannot salary sacrifice below these amounts, and you will need to adjust any Basic Earnings Assessment templates you may have used in the past to reflect the new personal tax allowance rates as detailed below.

Personal Tax Allowance

From 6 April 2019, the Personal Tax Allowance will be increased to £12,500. This is the amount you can earn before paying Income Tax. The basic rate limit will be increased to £37,500 and the higher rate threshold will be £50,000. These changes apply to non-savings, non-dividend income in England, Wales and Northern Ireland, and to savings and dividend income in the UK. The rates for 2019-20 are set out in the table below:

Band                                   Taxable income             Tax rate

Personal Allowance         Up to £12,500                      0%

Basic rate                           £12,501 – £50,000             20%

Higher rate                        £50,001 – £150,000          40%

Additional rate                 over £150,000                     45%

Further information on the Personal Tax Allowance can be found on the gov.uk website: www.gov.uk/income-tax-rates

Note that since April 2017, the Scottish Parliament sets the basic rate limit and higher rate income thresholds for Scotland. Further information is available here: www.gov.uk/scottish-income-tax

Maternity, Paternity, Adoption and Shared Parental Pay rates

From 6 April 2019, the weekly rates for Statutory Maternity, Paternity, Adoption and Shared Parental Pay have increased to £148.68 (or 90% of the employee’s average weekly earnings, whichever is lower).

Information & Advice

If you would like further information on any of these changes, call Employers For Childcare’s Family Benefits Advice Service on 028 9267 8200. We will be updating our suite of factsheets for employers and parents, so keep an eye to our website and social media for updates.