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As always, the new tax year brought a number of changes. And as a limited company director, it’s likely that some of these changes will impact you directly. To help get you up to speed, we’ve put together a rundown with some of the new changes.
The 2019/20 tax year will see the personal allowance rise from £11,850 to £12,500. The higher rate threshold is also increasing from £46,350 to £50,000 in England, Wales and Northern Ireland.
If you pay yourself in dividends through your limited company, the allowance is remaining at £2,000. This means you’ll get to earn £2,000 as dividends before paying tax. Beyond this, you’ll pay tax on dividends at 7.5% if you’re a basic rate taxpayer, 32.5% for a higher rate, and 38.1% for an additional rate.
You can discover more about your dividends in our guide here.
The earning thresholds for student loan repayments have also increased as follows:
Plan 1 has increased from £18,330 to £18,935.
Plan 2 has increased from £25,000 to £25,725.
The lifetime allowance has increased from £1,030,000 to £1,055,000.
Employer-Supported Childcare stopped allowing new applicants from 4th October 2018. In its place, the government have implemented the Tax-Free Childcare Scheme. If you’re looking for more information about how these changes could affect you, we’ve put together a guide for your reference.
There’s a lot to take in when the new tax year rolls around and getting your finances in order isn’t always easy. As your accounting partner, our resources hub is here to help you with all you need to know about contracting, from tax and insurance, starting up and everything in between.
Visit our free resources hub to find out more.