2018 Budget
There are a few changes announced that will affect the payroll from April 2019. Some of these were already known, and some confirmed or changed on Monday. The following is a summary of some of the changes that will affect payroll from April:
Minimum Wage Rates are to increase from April
| Age | 2019 | 2018 |
|---|---|---|
| 25 and over (National Living Wage) | £8.21 | £7.83 |
| 21 – 24 | £7.70 | £7.38 |
| 18 – 20 | £6.15 | £5.90 |
| Under 18 | £4.34 | £4.20 |
| Apprentice Rate | £3.90 | £3.70 |
Tax allowances to increase ahead of schedule
The Personal Allowance increases to £12 500, and the High Rate Tax threshold to £50 000.
This means that the Basic Rate is payable on the first £1 – £37 500 above the Personal Tax Threshold, Higher Rate on £37 501 – £150 000, and Additional Rate over £150 000
The rates remain the same at 20%, 40% and 45%
The Income limit for personal allowance remains the same at £100 000, above this the personal allowance starts to be reduced.
Off Payroll Working
Off payroll working – IR35. Responsibility will move from individuals to the organisation / agency. Although there was a possibility of these changes being brought in for 2019 the delay to 2020 has been confirmed, and additionally that the plan is to make small organisations exempt. There will be further announcements as we approach April 2020.
Employment Allowance
The Employment Allowance of £3000 per year will be restricted to companies with an employer’s National Insurance bill lower than £100 000. The £3000 per year remains unchanged.
National Insurance
There are fairly minor changes to the class 1 National Insurance Contributions:
Weekly Lower Earnings Limit £118 (to be eligible for statutory benefits)
Weekly Primary and Secondary thresholds both rise to £166 (employees and employers start to pay National Insurance)
Weekly Upper Earnings Limit, Upper Secondary Threshold, and Apprentice Upper Secondary threshold rises to £962
The rates remain the same of 12% and 2% for employees and 13.8% for employers. The exemptions for apprentices and the under 21s are also unchanged.
Apprenticeship Levy
Apprenticeship Levy remains the same at 0.5% and with a £15 000 allowance.
