Happy New Tax Year

The new tax year began on 6th April and this year has brought many financial changes that will impact all individuals and businesses. Here is a summary on some of the biggest changes:

1. The New National Minimum Wage 

The minimum wage has increased for all workers, although some have seen more of a gain than others. 

Year 25 years and over 21 to 24 years 18 to 20 years Under 18 years Apprentice 
Old Rates £7.50 £7.05 £5.60 £4.05 £3.50 
New Rates from April 2018 £7.83 £7.38 £5.90 £4.20 £3.70 

2. Auto Enrolment Pension Contributions to Rise

Contributions have risen from a total of 2% with a 1% contribution from the employer and a 1% contribution from the employee. On Friday this increased to a total of 5% with 3% from the employee and 2% from the employer. 

3. Increase in Personal Allowance 

The amount you can earn without paying income tax has risen from £11,500 to £11,850, this works out as a tax cut of £70 for most people. The threshold for people paying the higher rate of income tax (40%) has also increased from £45,000 to £46,350. 

4. Decrease in Dividend Allowance 

Until Friday you could have earned £5,000 in dividends tax free. This has now decreased to only £2,000. Any dividends in excess of this will incur a tax charge of between 7.5% to 38.1%. If you are unclear how this impacts you, you should talk to your accountant. 

5. Student Loan Repayments 

Before now students had to repay their student loans at a rate of 9% on all earnings over £21,000. Now this threshold has been raised to £25,000. Leaving graduates up to £30 a month better off.


If you have any questions about these changes and what they mean for you then please feel free to contact us on 01733 699033. 

LeeP Accountants

Helping you keep more of your money