Minimum Wage Increases
The National Minimum Wage will increase from 1 April 2019 by over 4% for those over 18. The new rates are shown below and full details can be found here: https://www.gov.uk/national-minimum-wage-rates
Top Minimum Wage Mistakes Employers should be aware that this is a hot topic for HMRC at the moment and the number of investigations in respect of minimum wage compliance is high.
HMRC have highlighted the top 10 mistakes which employers make when paying the National Minimum Wage (NMW) in their latest Employer Bulletin.
Even if you are not an employer you may have friends or family who are paid the minimum wage and should double check the guidance to ensure they are not being underpaid.
Auto Enrolment Pension Rate Increases
The minimum pension contribution rate is currently 5% of qualifying earnings, of which at least 2% must be paid by the employer. In April 2019 this rises again to 8% of qualifying earnings, of which at least 3% must be paid by the employer.
Tax Free Childcare
We have become aware that some parents are missing the opportunity to save 20% on their childcare costs. If you, or anyone you know, has young children and pay for qualifying childcare please ensure they are taking advantage of these savings where possible. See more regarding eligibility and the mechanics here.
Grandparents can also benefit from additional National Insurance credits (to help maximise their state pension) if they look after their grandchildren and do not work (or have reduced their hours and no longer pay National Insurance). See more here.
Tax Band Increases
The new personal tax rate bands which apply from 6 April 2019 are as follows:
This means that the minimum income (Personal Allowance) you have to earn in a year to start paying tax in the UK will now be £12,500 (currently £11,850). Similarly, the basic tax rate of 20 percent, which currently applies if you earn up to £46,350 a year, has been extended to £50,000.
Please note that different rates now apply for anyone living in Scotland as the Scottish Parliament now have the power to set their own rates, see here.
Making Tax Digital (MTD) for VAT
For those of you that are registered for VAT, you may have received a letter from HMRC regarding keeping your VAT records digitally from April 2019. All of the businesses we prepare or submit VAT Returns for are (or will be) ready in time for this deadline, however if we do not assist you with your VAT Returns then you should be aware of the new requirements.
VAT Returns will be required to be prepared and submitted digitally, compatible software includes Sage, Xero, QuickBooks and FreeAgent, so if you're using one of these already the VAT submission process will be very similar. However, you will need to sign up to MTD for VAT online (we suggest doing this in April). If you are keen to start early you can sign up here but must have software in place. If we prepare or submit your VAT Returns to HMRC you do not need to anything, we will complete the sign up for you.
If you are concerned you may not be prepared to submit your VAT Returns via compatible software please contact us so we can assist you further. Will no deal Brexit effect your business? The direct impact of a no deal Brexit will be key for businesses who import or export goods to or from Europe. HMRC have advised that these businesses should register for a UK Economic Operator Registration and Identification (EORI) number at www.gov.uk/hmrc/get-eori. Businesses who import fresh products to or from Europe (such as food or flowers) may be most disadvantaged under a no deal Brexit as there may be delays at the border after 29 March.
There are virtually no businesses in the UK that won’t be affected by Brexit. For example, you may be a mechanic serving only UK customers, but the replacement parts you require might not be manufactured in the UK, so you may need to source new suppliers to avoid possible delays and extra costs involved with potential customs duties, or plan these delays and fees into your existing procedures. Company Car Tax New benefit in kind bands for vehicles with zero emission mile ranges come into force from 2020. As usual, percentages for most standard petrol and diesel cars are increasing. However, the benefit in kind on a fully electric car will fall from 16% of the list price to just 2% from 6 April 2020. You can view a full table of the coming changes here.
If you're looking at a company car for yourself or any employees comcar.co.uk is an excellent website for checking how much tax you can expect to pay in this year and future years. If you have any queries with any of the above or require specific advice in relation to any tax, VAT or accountancy issues please do not hesitate to contact us.