The Financial tax year has come to a close, which means that we now need to look forward to the 2019 financial tax year and adjust to the changes that can affect all of us. But what are the changes that have been made? Find out here.

1. Personal Tax Allowance

In an unexpected boost, the personal allowance is rising to £12,500. The higher rate tax threshold jumps to £50,000 except in Scotland, where it stays at £43,430. The new £50,000 threshold will then remain frozen for 2020/21.

2. National Insurance Contributions

It’s not all plain sailing though. The upper earnings limit for full rate individual NICs throughout the UK also hits £50,000, matching the higher rate threshold. This negates some of the income tax saving or, in Scotland, potentially all of it.

3. Pension Contributions

On pensions, the annual allowance remains unchanged at £40,000, but the lifetime allowance creeps up by £25,000 to £1.055m.

4. Inheritance tax

The second part of an IHT review is due out in spring from the Office of Tax Simplification.  Meanwhile, the IHT residence nil rate band increases by 20% to £150,000, marginally easing the tax burden for some estates.

Inheritance Tax


5. ISAs

For savers, ISA limits stay frozen except for an additional £108 a year on the Junior ISA subscription limit.  The Help-to-Buy ISA closes to new investors from December 2019.

6. Vehicle Tax

Drivers of low emission vehicles will be hardest hit as the tax screw turns further on company cars, with most scale percentage charges rising by 3%. Fuel benefit charges increase more modestly in line with RPI.

7. Entrepreneurs’ Relief

The minimum qualifying period for Entrepreneurs’ Relief will double to two years.

8. Buy-to-let

The squeeze on buy-to-let investors continues, as the next round of the buy-to- let mortgage interest changes take effect. Only 25% of interest will receive full tax relief, with the rest receiving a 20% tax credit.

9. Annual Investment Allowance

Since January 2019 businesses have been able to benefit from a temporary two-year hike to the limit on claiming 100% tax relief on most plant and machinery expenditure.  The first year annual investment allowance has risen from £200,000 to £1 million, but only until 31 December 2020.

10. Making Tax Digital

Making Tax Digital (MTD) finally came into effect on April 1st for most VAT -registered businesses with turnover above the £85,000 threshold.


Contact us for more information on any of the above points or to discuss any aspect of financial planning and tax-efficient savings opportunities in the new tax year.