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New tax year: changes for employers

With a few weeks to go before the new tax year begins on 6 April 2019, it’s a good time to recap the upcoming changes and make sure you’re prepared.

If you’re an employer, there are a few updates to be aware of – including changes to wages, pensions and benefits in kind – and you’ll need to take certain steps before these take effect.

This could include reviewing your payroll arrangements, communicating the changes to your staff, and updating any internal documents.

To help you plan ahead, we’ve outlined the main points of note in these areas for 2019/20.

Minimum wage rates

From 1 April 2019, the national living wage is changing from £7.83 to £8.21 an hour – an increase of around 4.9%. This applies to most workers aged 25 and above.

Other workers must be paid the following rates at minimum:

Age

Minimum hourly rate 2018/19

2019/20

25 and over

£7.83

£8.21

21 to 24

£7.38

£7.70

18 to 20

£5.90

£6.15

Under 18

£4.20

£4.35

Apprentice

£3.70

£3.90

Pension contributions

As an employer, you’re required to enter eligible staff into a workplace pension under auto-enrolment legislation, and make contributions as a percentage of their qualifying earnings.

The minimum contribution rate for employers is set to rise from 2% to 3% in the 2019/20 tax year. For employees, it’s increasing from 3% to 5%.

The percentage is taken from pay that falls between the lower and upper limit of the employee’s earnings.

In 2019/20, the lower level for qualifying earnings will rise to £6,136, while the upper level is set to change to £50,000.

Company cars and vans

If you provide staff with vehicles available for private use, you’ll need to be aware of a few tax changes related to this benefit.

For employees provided with fuel for private mileage in a company car, the value of the multiplier used for calculating the cash equivalent of the fuel benefit will increase from £23,400 to £24,100.

The van benefit charge will increase from £3,350 to £3,430, and the van fuel benefit charge will increase from £633 to £655.

Contact us

Get in touch for more information on these tax changes and how they could affect you.

We offer a range of services for employers, including bookkeeping and payroll, and can ensure you’re up-to-date on tax legislation so you can focus on running your business.

Email tracya@knightandcompany.co.uk or call 01628 631056 to talk about planning for the new tax year.