insideKENT Magazine Issue 84 - March 2019 | Page 159

BUSINESS
Employment
Tax Changes
2019/20
by Rick Schofield, Partner at Wilkins Kennedy Ashford
WITH 5TH APRIL RUSHING
TOWARDS US AND HERALDING THE
START OF A NEW INCOME TAX
YEAR, SOME CHANGES TO BEAR IN
MIND GOING FORWARD.
PAYE and NICS
Announced in the November 2018 budget was
an acceleration in the increase in the personal
allowance to £12,500. Originally expected to
rise to this level by 2020/21, this increase has
been brought forward to April 2019. There have
also been increases in the basic rate and National
Insurance thresholds which are all set to benefit
the taxpayer.
Income tax thresholds are determined by
devolved parliaments and 2018/19 saw changes
to the rates payable by Scottish taxpayers for
the first time. These changes continue into the
2019/20 tax year with five different income tax
rates in place for Scottish taxpayers. April 2019
also sees the introduction of Welsh tax
codes. However, the tax rates for Welsh
taxpayers in 2019/20 will mirror those in place
for England and Northern Ireland so there will
be no immediate financial impact. Tax rates are
determined by where the taxpayer resides,
not where they work and are indicated on
tax codes by a prefix of “S” for Scottish
taxpayers and “C” for Welsh taxpayers. HMRC
will notify employers of any amendments via P6
or P9 notices.
National Minimum Wage and Statutory
Payments
Increases to the National Minimum Wage across
all age groups take place from 1st April 2019.
The new rates are as follows:
Increases for statutory payments such as
Statutory Maternity, Paternity, Adoption and
Shared Parental Pay and Statutory Sick Pay
take place from 6th April 2019. guidance from HMRC along with developments to its
Employment Status Indicator tool but with many cases still
being decided by the courts, uncertainty looks likely to
continue into 2019/20 and beyond.
Pension Contributions
April 2019 sees the final increase in the
Automatic Enrolment minimum pension
contributions rate. From April, the minimum
contribution rate increases to 8% of which a
minimum of 3% must be an employer
contribution. The Good Work Plan also outlined changes to the holiday
pay reference period for the calculation of holiday from
12 weeks to 52, a ban on employers making deductions
from tips and gratuities and a right to a written statement
outlining contract and rights from day one for all workers,
not just employees.
Payslips
From April 2019, the statutory right to receive
an itemised payslip will be extended to all
workers, not just employees. For those whose
pay varies depending on the number of hours
worked, their payslip must show the amount of
time they are being paid for. Employees are
defined under the Employment Rights Act 1996.
Expenses and benefits
Employers who reimburse subsistence costs at
HMRC benchmark rates will no longer have to
check receipts from April 2019. However,
they will still need to keep records demonstrating
the expense was incurred for qualifying
business purpose.
Currently where employers pay contributions
to a life assurance policy or a qualifying
recognised overseas pension scheme (QROPS)
and the beneficiary is the employee (or certain
members of the employee’s family), no benefit
in kind exists. From April 2019 this exemption
is extended such that the provision of death or
retirement benefits will not be subject to tax
when the beneficiary is any individual or a
registered charity.
Working Practices
Following the Independent Taylor Review of
Modern Working Practices and the subsequent
release of the Good Work Plan, the gig economy
and employment status continues to receive
attention. There have been promises of clearer
The Future
Whilst there remains much uncertainty ahead, there
zare some changes already announced for April 2020.
These include:
• Extension to the off-payroll working legislation to those
engaged through personal service companies to most of the
private sector.
• Secondary Class 1 NICS (employers) payable on termination
and redundancy payments above £30,000.
• Executive Pay Ratio reporting.
If you would like help or guidance with any employment tax
issues, please contact us at Wilkins Kennedy.
Local offices:
Ashford: 01233 629 255 / Canterbury: 01227 454 861
Maidstone: 01622 690 666 / Orpington: 01689 827 505
Sandwich: 01304 249 997
[e-mail]
www.wilkinskennedy.com
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