Happy New (tax) Year!

The new tax year officially came into force on Saturday 6 April, bringing with it a host a new legislation changes.

Income tax

The tax-free personal allowance has increased from £11,850 to £12,500 for 2019/20 — saving the majority of earners up to £130 this year. The higher-rate tax bracket has also increased from £46,350 to £50,000 across England, Northern Ireland and Wales – saving higher-rate taxpayers a further £730 (£860 in total) – but has remained unchanged in Scotland at £43,430.

Don’t go spending that extra cash just yet though — earners between £46,350 and £50,000 are now hit by the higher 12% national insurance contribution rate as part of the new changes.

Inheritance tax

40% inheritance tax will still apply to estates valued over the inheritance tax threshold (nil-rate band) of £325,000. But there has been an increase in the main residence allowance (residence nil-rate band) – from £125,000 to £150,000.

This means you can pass on an extra £25,000 tax free — bringing the total allowance to £475,000, if part of your estate is the family home. Spouses can make use of both allowances, meaning £950,000 can effectively be passed on by a couple, before incurring tax charges. Limits may apply.

Capital gains tax

The capital gains tax allowance (tax on the profit you make from selling an asset) has increased from £11,700 to £12,000 for the new tax year.

Pensions

There has been a 2.6% increase to both the basic and new state pensions.

The lifetime allowance (the total amount you can amass, tax free, in your pension pot over your career) has also been given a boost – from £1.03m to £1.055m – while the maximum annual allowance of £40,000 for tax relief on contributions remains unchanged.

Auto-enrolment contributions to workplace pensions have also increased from 5% to 8%, with a minimum of 3% of contributions coming from your employer. (If you noticed a small dip in your monthly pay packet last week and you’re paying into a workplace pension, this is why — your contributions have increased.)

Brexit delayed (again)

European Union leaders granted the UK another Brexit extension following further discussions in Brussels at the start of April.

While the six month extension means that the UK has until 31 October to leave the EU, European leaders have warned that it should only be used for “as long as necessary”. If Prime Minister Theresa May manages to pass her withdrawal agreement with MPs before that, an earlier exit could still be on the cards.

The UK must now hold elections to the European Parliament in May as part of the extension agreement. Failure to do so would mean leaving on 1 June with no deal.

As far as any renegotiations are concerned, the EU has made it clear that there are to be no further changes to the withdrawal agreement.

While Donald Tusk, President of the European Council, made a plea to Mrs May and the rest of the UK to “not waste this time”, Mrs May expressed her regret that she has not been able “to persuade Parliament to approve a deal.”

What’s in store for the next couple of months? Well, one thing’s for sure: more Brexit news dominating the headlines, as the saga continues.

Gender pay gap widens in almost half of UK businesses

Private companies had until midnight on 4 April to submit their gender pay gap reporting, with 10,428 UK businesses turning over their figures before the deadline.

Any company with more than 250 employees is legally required to disclose their gender pay data after the Equality Act 2010 was finally enforced two years ago. Failure to do could result in enforcement action from the Equality and Human Rights Commission.

45% of companies have seen an increase in their gender pay gap in favour of men compared to last year, with a total of 78% of all businesses now reporting a pay gap that favours male employees. 7% of companies reported no change in their figures, while 14% had a pay gap which favoured women.

UK fintech week gets underway

Celebrating innovation, imagination and openness, UK FinTech Week (29 April to 3 May) is currently underway across the country, with hundreds of key figures from the world of finance and technology expected to attend.

Kicking off at the Guildhall, London, with the Innovate Finance Global Summit, the week-long series of events will be held largely in the capital, with others taking place in Manchester, Leeds and Edinburgh.

Mark Carney, Governor of the Bank of England, and Chancellor Philip Hammond will be among those delivering keynote speeches during the event, which aims to showcase “the UK’s position as a global capital of FinTech”.

In other news…

Ultra Low Emission Zone (ULEZ) phased in across city

The first phase of London’s new ULEZ initiative came into force on Monday 8 April, as part of the wider strategy to lower emissions and reduce the capital’s dangerous levels of air pollution.

The same area of central London that’s covered by the congestion charge has now been declared an Ultra Low Emission Zone — 24hrs a day, all year around. By October 2021, it’s expected that the boundary will increase to include much more of London and its surrounding areas.

Based on European emission standards regarding the amount of harmful toxins a vehicle can produce, drivers of vehicles that fail to meet standards will be subject to a £12.50 daily charge on top of the £11.50 daily congestion charge already operating within central London.

Lorry drivers will face a £100 daily charge if their vehicle falls below ULEZ standards, with a penalty of £1,000 for failing to pay on time.