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Payroll Tax Year Changes 2018/2019

As an employer, it’s important to stay on top of all the changes that come into effect every April. We’ve put together a summary of the key fact and figures.

Auto Enrolment increases (phasing)

On 6 April 2018, minimum Auto Enrolment contributions will increase. At the moment both employers and employees need to contribute at least 1% (making a total of 2%) to qualify for the scheme. This will rise to a minimum of 2% to be paid by employers and 3% by employees, making a total of 5%. A further increase will take place from 6 April 2019.

QuickBooks Online will automatically uplift the minimum contribution, QuickBooks Desktop users will have to make sure they change the contribution before running the first period in 2018/9.

Dates Minimum employer contribution Minimum employee contribution Total minimum contribution
Before 5 April 2018 1% 1% 2%
6/4/2018–5/4/2019 2% 3% 5%
From 6 April 2019 3% 5% 8%

Auto Enrolment thresholds 2018/2019The upper and lower limits for Auto Enrolment are increasing in line with National Insurance thresholds. The earnings trigger remains the same.

Weekly 2 Weekly 4 Weekly Monthly Quarterly Half Yearly Annual
The lower level of qualifying earnings £116.00 £232.00 £464.00 £503.00 £1508.00 £3016.00 £6032.00
Earnings trigger for Auto Enrolment £192.00 £384.00 £768.00 £833.00 £2499.00 £4998.00 £10000.00
The upper level of qualifying earnings £892.00 £1783.00 £3566.00 £3863.00 £11588.00 £23175.00 £46350.00

Personal Tax Allowance and tax codesAcross the UK, the Personal Tax Allowance for 2018/19 is £11,850.

If you are using QuickBooks Online, the tax codes will automatically uplift if you have any employees with an L, M & N suffix. If you are using QuickBooks Desktop, this will need to be completed manually.

  • The emergency tax code is now 1185L wk1/mnth1
  • L suffix codes will increase by 35 (e.g. 1150L become 1185L).
  • M suffix codes will increase by 39 (e.g. 1265M becomes 1304M).
  • N suffix codes will increase by 31. (e.g. 1035N become 1066N).

National Insurance

There are no changes to National Insurance rates (%) or Employment Allowance, but the thresholds will be raised.

New weekly thresholds

  • The Lower Earnings Limit has increased from £113 to £116
  • The Primary Threshold has increased from £157 to £162
  • The Secondary Threshold has increased from £157 to £162
  • The Upper Earning Limit, Upper Secondary Threshold, and Apprentice Upper Secondary Threshold have increased from £866 to £892

New monthly thresholds

  • The Lower Earnings Limit has increased from £490 to £503
  • The Primary Threshold has increased from £680 to £702
  • The Secondary Threshold has increased from £680 to £702
  • The Upper Earning Limit /Upper Secondary Threshold /Apprentice Upper Secondary Threshold – From £3,750 to £3863

Statutory Payments

  • Statutory Sick Pay rises from £89.35 to £92.05 per week.
  • Statutory Maternity, Paternity, Adoption and Shared Parental Pay rises £140.98 to £145.18 per week.

There are no changes to the amount employers can recover.

Student Loans The Government has increased Student Loan repayment thresholds for 2018-19. Both loans are deducted at 9%:

Student Loans 2018/2019 2017/2018 Change
Plan 1  £18,330 £17,775 Increase of £555
Plan 2 £25,000 £21,000 Increase of £4,000

These figures will apply to all current and future borrowers that employers make Student Loan deductions for.

Scottish Rates of Income Tax 2018/2019The Scottish Government is introducing two new tax codes and changing the thresholds for two other rates:

Tax rate Tax Code Percentage Threshold
Starter rate (new) Not required 19% £11,850–13,850
Basic rate SBR 20% £13,851–24,000 (change)
Intermediate rate (new) SD0 21% £24,001-43,430
Higher rate SD1 41% (change) £43,431–150,000 (change)
Top rate SD2 (new) 46% (change) £150,001 and above

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