With the new Tax Year almost upon us we review the changes to tax from 5th April 2018.
Minimum Wage Increases
Minimum wage increases from April 2018. For employees over 25 the increase is from £7.50 to £7.83 per hour. Other ages and categories of employees’ rates can be found here: http://www.minimum-wage.co.uk/
Deducting Mortgage Interest for Property Income
From April 2018 the % of mortgage interest that is tax deductible for buy to let properties reduces from 75% to 50%. By 2020-21 this is will be 0%.
Income Tax thresholds
These have all moved up with Taxable Allowance increasing to £11,850 and Basic Rate rising to £34,600 which means Higher Rate tax starts this year at £46,450.
Dividends Allowance has been slashed from £5k to £2k in 2018-19 tax year, bringing an extra £225 in tax to Basic Rate shareholders.
Capital Gains Allowance
From Apr 2018 the amount of tax free Capital Gains increases from £11,300 to £11,700.
Student Loan Plan Thresholds
The thresholds for paying Student Loan have increased as follows:#
- Plan 1 loans will rise to £18,330
- Plan 2 loans will rise to £25,000
Benefit in Kind for Company Vans
Employees or Directors with personal use of company vans or fuel provided for personal use will see rises in the amount that is considered Benefit in Kind. The flat rate for personal use of vans rises to £3,350 and fuel rises to £633.
Diesel Supplement for Company Cars
The government is also introducing extra Benefit in Kind charges on diesel cars that fail to meet new Real Driving Emissions Step 2 (RDE2) standards.
Life-Time Allowance for Pension
From April the Life-Time Allowance for pension contributions increases from £1million to £1.03million.