There was good news for individual taxpayers in the Budget; the personal allowance will rise from £11,850 to £12,500 on 6 April 2019. This will provide taxpayers on the basic rate (20%) with an income tax saving of £130 per year.
Those who pay tax at higher rates will also rejoice that the 40% band will effectively start at income over £50,000 for 2019-20.
Not Scottish tax payers
This will not apply to taxpayers in Scotland as they pay tax on earnings and profits at different rates and bands than apply in the rest of the UK. The Scottish tax rates for 2019-20 are due to be announced on 12 December 2018.
England and Wales
Welsh taxpayers will pay Welsh income tax from 6 April 2019, but the Welsh tax rates and bands have initially been set to align with those in England and Northern Ireland. Welsh tax-payers should soon receive PAYE codes with a pre-fix “C” (Cymru).
If your total income is £50,000 or more and your family receives child benefit, you should inform HMRC that you need to pay the high income child benefit charge (HICBC) to repay some or all of that benefit. All the child benefit is clawed-back for income levels over £60,000. The HICBC is collected through the tax return of the highest earner in the family, or through their PAYE code, irrespective of who actually receives the child benefit.
This charge could make your marginal tax rate including national insurance, jump from 32% to 62% at £50,000 from 6 April 2019.
Would you like help and advice on this or any other issue?
Contact us straight away by telephoning 01932 564098 or email us using our ‘Contact Us’ page.
This note was published from our Briefing on the Autumn 2018 Budget dated November 2018
Please be aware that the information above may have changed in subsequent months.
This note is written for the general interest of our clients and is not a substitute for consulting the relevant legislation or for taking professional advice.