Four things to look out for in the new tax year
With a new tax year come changes to tax and benefits. But just as it’s important to know what changes are being made, it’s equally, if not more important, to actually understand how the change affect you or your business, or if it even has an impact on you at all. Here are four of the key changes to look out for at the start of the 2018/19 tax year and how to work out whether or not you need to do anything.
- Employer pension contributions – It’s likely that you’ll have heard about the increase for employer pension contributions through auto-enrolment, but you might not be so clear on exactly what your business will have to do to meet the new minimum contribution. If, in April 2018, an employer already contributes the minimum 2% or more, and the total contribution of both the employer and the employee is 5% or more, the employer doesn’t need to change anything. If the employer or total contribution is under the respective figure, an increase will be needed. It’s also worth remembering that from April 2019, the minimum employer contribution goes up to 3% and the total contribution to 8%.
- Salary sacrifice and P11D – Whilst the law still states that a P11D needs to be provided for certain benefits provided under an optional remuneration arrangement, usually known as a salary sacrifice, HMRC has conceded that this won’t be the case for particular instances. This is due to PAYE regulations not being updated to accommodate the ‘relevant amount’ which is the new taxable value. In such cases, as long as the correct relevant amount has been payrolled by the employer, a P11D won’t be needed for 2017/18.
- National minimum wage increase – The increase applies to the first pay period beginning on or after 1st April 2018. If the change falls in the middle of an employee’s pay period, it’s not necessary to adjust the old and new national minimum wage rates; the increased wage should simply be implemented for the first pay period after 1st April.
- Childcare vouchers – it was proposed that new entrants would not be admitted to employer-provided childcare voucher schemes from 6th April 2018. Following a Commons debate, the deadline has been extended to October 2018.although this still means it is one to watch out for in the 2018/2019 tax year.