New tax year changes: What accountants need to know

April 24th 2019 | Posted by Phil Scott

The new tax year is now underway and, with it, the more legislation changes.

Most accountants will be aware of the tax changes that will affect them. We’ve put together all the changes to help you get them clear in your mind…


From 6th April, 2019, employers must provide itemised payslips to all their “workers.” Before this, employers were only required to provide pay slips to those who are classified as “employees”, as per the Employment Rights Act 1996.

With the new regulations, any employers engaging their workers without negotiating a full employment contract will have to take a look at their systems and make sure that they are in a position to provide appropriate information once the new tax year begins.

Changes in take home pay

Personal allowances for the year 2019/20 have been substantially increased. Even with NIC payments being higher, the basic rate band means most employees’ take home money has gone up. The majority of basic rate taxpayers will have about £3 per week more on average.

For taxpayers who pay a higher rate and are entitled to receiving a personal allowance, this number will be £10 a week. For those who are not entitled, the weekly amount will be £5.

However, for those making pension contributions at levels of auto-enrolment it’s slightly different. The increase in contributions will cause their take-home amount to decrease unless they get a salary raise from April, 2019 onwards. This comes into play with the increase to the minimum wage.

Minimum wage increases

Minimum Wage (Worker Age)Hourly Rate from April 2018Hourly Rate from April 2019
Apprentices <19 and/or in first year£3.70£3.90
Under 18£4.20£5.90
21 -247.38£7.70
25 and over£7.83£8.21

Auto enrolment minimum contribution increases

 From April 2018From April 2019

Thresholds for Student Loans

With the start of the new tax year, the threshold for Plan 1 has risen to £18,935 while the threshold for Plan 2 will increase to £25,725. However, the rate of deduction for both plans remains the same at 9%.

“C” PAYE Codes for Income Tax Rates in Wales

Irrespective of where they work, Welsh taxpayers have a tax code issued to them for the year 2019/20 that they have the prefix “C.” New legislation doesn’t not make much difference to the amount they take home since the Welsh Assembly have adopted the same income tax rates as those in the UK.


Employers no longer have to check receipts when it comes to reimbursing employees for subsistence with the help of benchmark scale rates. This includes scale rates overseas.

However, they still have to prove that a particular employee’s claim for scaling the rates is actually linked to qualifying travel for business. Where industry-wide rates and payments on bespoke scale rate are concerned, checking the receipts will still be mandatory.

Increased Tax Exemptions for QROPS and Life Assurance Contributions by Employers
Employer contributions made to life assurance plans and Qualifying Recognised Overseas Pension Schemes (QROPS) are not a taxable benefit in kind (BIK) if the employee or certain family members are the beneficiaries. In cases where the beneficiary does not fall under either category, the contribution are considered as BIK with NIC and tax applicable on it.

This tax exemption has now been widened so that retirement or death benefits would not be taxable so long as the beneficiary happens to be an individual (meaning that they do not necessarily have to be a family member) or a charity registered with the British government.


The percentage charge for the purpose of computing a car benefit has increased by 3% for all level of CO2. However, the maximum level remains at 37% of the total list price. This applies on cars having CO2 emissions more than or equal to 165 grams per kilometre.

Keep in mind that cars running on diesel have a 4% supplementary charge applied on them (as per the 37% maximum charge overall). But a diesel car can be exempted from this charge if it adheres to the Euro standard 6d for the coming year. You can inform the HMRC about the exemption being applicable on “Fuel Type F” when you submit the relevant P46 form for the car. If car benefits are being pay-rolled, then put an “F” in box number 177 of the Full Payment Submission section.

£24,100 is now the multiplier for the charge on car fuel benefit. With regard to company vans, the charge on flat rate benefit will be £3,430 while the fuel benefit charge for the van will be £655 for the year 2019/20.

There has also been a change in the optional remuneration regulations. This modification will take away the opportunity from employers to apportion car allowance which is normally available to drivers of company cars all across the car, maintenance, insurance, and other costs.

As per the new rules, the value considered of the company car benefit will be the higher one of the “altered cash equivalent” of the car benefit as well as the otherwise available apportioned allowance for the car. While the computation may become simple with this change, it will lead to more employees experiencing an enhancement in the car benefit which must be clearly communicated by the employer to the employees who may be affected by this new law.

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