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With the new tax year, 2019/20, fast approaching we wanted to provide you a quick overview of the changes that you can expect for this new tax year. Please note that unless otherwise stated, these new rates and thresholds apply from 6 April 2019 to 5 April 2020.

Tax thresholds, rates and codes
The amount of income tax you deduct from your employees depends on their tax code and how much of their taxable income is above their personal allowance.

England & Northern Ireland

  • Employee personal allowance - £12,500 per year
  • Basic tax rate band - 20% on annual earnings between £12,501 to £50,000
  • Higher tax rate band - 40% on annual earnings between £50,001 to £150,000
  • Additional tax rate band - 45% on annual earnings above £150,000

Scotland

  • Employee personal allowance - £12,500 per year
  • Starter tax rate band - 19% on annual earnings between £12,501 to £14,549
  • Basic tax rate band - 20% of annual earnings between £14,550 to £24,944
  • Intermediate tax rate band - 21% on annual earnings between £24,945 to £43,430
  • Higher tax rate band - 41% on annual earnings between £43,431 to £150,000
  • Top tax rate band - 46% on annual earnings above £150,000

Emergency tax codes
The emergency tax codes are:

  • 1250L W1
  • 1250L M1
  • 1250L X

Class 1 National Insurance thresholds

  • Lower Earnings Limit (LEL) - £6,136 per year
  • Primary Threshold (PT) - £8,632 per year
  • Secondary Threshold (ST) - £8,632 per year
  • Upper Secondary Threshold (UST) - £50,000 per year
  • Apprentice Upper Secondary Threshold (AUST) - £50,000 per year
  • Upper Earnings Limit (UEL) - £50,000 per year

Employer (secondary) contribution rates are paid to HMRC as part of your monthly PAYE/NIC liability and remain at 13.8% of earnings above ST up to and including UEL/UST/AUST.

Student loan and Postgraduate loan recover

  • Employee earnings threshold for Student loan Plan 1 - £18,935 per year
  • Employee earnings threshold for Student loan Plan 2 - £25,725 per year
  • Student loan deductions - 9%
  • Employee earnings threshold for Postgraduate loan - £21,000 per year
  • Postgraduate loan deductions - 6%

Auto Enrolment Pension Contributions
Please note that you should have received, or can expect to receive shortly, a communication from your pension provider informing you of the statutory increases to the auto enrolment pension contributions. In summary the new rates are:

  • Employer minimum contribution - 3%
  • Staff contribution - 5%
  • Total minimum contribution - 8%

Payslip presentation – Where pay varies by time worked
From April 2019 additional information must be shown on a payslip for workers whose pay varies depending on the number of hours they have worked.

Where this applies, the number of hours paid for on this basis (i.e. on the amount of time worked) must be shown. Any other hours do not need to be shown (although of course they can be shown if it would be helpful to do so). For example, where a worker has a fixed salary each month, and works variable overtime with additional pay at an hourly rate, only the hours of overtime need to be shown.

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