Some key tax dates in 2019
Jan 09, 2019
There are a number of important tax dates to watch out for in 2019. The current tax year ends on 5 April, so make sure you’ve maximised your ISA allowances and you’ve taken advantage of your pension allowances before this date.
1 January – Increased Capital Allowances start
The Chancellor announced that there would be a temporary increase in the Annual Investment Allowance (AIA) for expenditure on plant and machinery to £1 million, from 1 January 2019. However transitional rules mean that the full amount will not necessarily apply to your business straight away, and the rules are a little more complicated if your expenditure exceeds £200,000.
Hogmanay Limited makes up its accounts to 30 June each year.
The maximum AIA available for any expenditure they make on plant and machinery for the year ending 30 June 2019 is £600,000, which is 6/12 x the old £200,000 limit plus 6/12 x the new £1,000,000 limit.
As the maximum AIA for expenditure incurred up to 31 December 2018 is £200,000, if they have already spent more than £200,000 up to this date then they won’t receive any extra relief on the excess. Only fresh expenditure on or after 1 January 2019 will be eligible for the new allowance.
The following year to 30 June 2020 the company would be entitled to the full £1 million.
31 January – Self assessment deadline day
If you’re required to submit a self assessment tax return, 31 January is the deadline you need to be working to. You’ll also need to have paid your tax bill by this date, and if you miss the deadline, you face a £100 fine.
March (and October) – Free Wills Month
If you’re looking to do some inheritance tax planning, this would be a good time to review (or make) your Will. If you’re over 55 you can get a simple will written or updated by a solicitor free of charge during these two months. The idea is that you make a charitable donation in return for this free service but you’re not obliged to do so. You can find out more here.
29 March – The UK leaves the EU
This is the date that the Brexit transition formally begins, but no one is yet any the wiser as to how it will end up affecting the UK’s tax regulations in the short or long term.
1 April – Making Tax Digital for VAT
If you run a VAT-registered business with a taxable turnover above the VAT registration threshold (currently £85,000) then from 1 April you will be required to keep digital VAT business records and file your VAT returns using new Making Tax Digital (MTD)-compatible software. This will apply for VAT periods starting on or after 1 April 2019. The existing online VAT return, submitted via the Government Gateway, will not meet MTD requirements.
MTD also means that it will no longer be sufficient to keep paper-only records for your accounts. From 1 April 2019, all your accounting records will need to be kept in digital format. It may still be acceptable to use spreadsheets to maintain your accounting records, but only if they are adapted so that they can transfer data directly into the new HMRC system.
1 April – New minimum wage rates
This is the date that the National Living Wage (for workers aged 25+) rises from £7.83 to £8.21. The National Minimum Wage will also rise from this day forwards, to £7.70 (for 21-24 years olds), £6.15 (for 18-20 year olds), £4.35 (for 16-17 year olds), and £3.90 (for apprentices under 19 or in the first year of their apprenticeship).
5 April – End of the 2018/19 tax year
This is the final date by which you can increase your ISA contributions and your pension savings within the 2018/19 tax year. The ISA allowance is capped at £20,000, and for most taxpayers the maximum pension contribution is £40,000 each tax year, although this depends on your earnings. This limit covers pension contributions made by both yourself and your employer.
If you have any unused pension allowance for a particular tax year this may be carried forward for three years and can be added to the relief for the current year, but any unused annual pension allowance is lost after three years. Hence if you have any unused pension allowance for 2015/16 this will lapse on 5 April 2019 if unused. (It’s worth noting that under the current rules the net after-tax cost of saving £10,000 in a personal pension for a higher rate taxpayer is only £6,000, but there are rumours that this generous relief may be reduced in future.)
6 April – Start of the 2019/20 tax year
This is when your ISA and pension annual allowances are refreshed and you can start building up your savings allowance once again. The ISA limit will remain at £20,000 for the new tax year but the junior ISA threshold will increase from £4,260 to £4,368.
From this date minimum auto-enrolment pension contributions will increase from 5% to 8%, of which a minimum 3% must come from the employer and at least 5% must come from the employee.
The State Pension will rise by 2.6% from 6 April 2019, which means that individuals who receive the old State Pension will now get an extra £3.25 a week, and those who receive the new State Pension will get £4.25 more a week.
The personal tax allowance, which is the amount you can earn before you have to start paying income tax, will rise from £11,850 to £12,500 and the higher rate tax threshold will go up to £50,000 from £46,350.
29 October – New Capital Allowance for commercial buildings
In his Autumn 2018 Budget the Chancellor announced a new 2% tax deduction for the cost of constructing or renovating commercial buildings and structures. HMRC have now issued a ‘technical note’, which explains how this new relief will work. Unlike the old Industrial Buildings Allowance, the new relief is available for the construction of shops and offices as well as factories and warehouses.
The new tax break is available when the contract is entered into and the construction costs are incurred on or after 29 October 2019. The allowance is available to commercial property landlords as well as trading businesses. There are special rules for leasehold buildings which determine whether the landlord or tenant is entitled to the allowance.
There are also more generous plant and machinery allowances available for fixtures and fittings within the building, and we can work with you to help you maximise this tax relief. The AIA referred to above would also mean that there may be 100% capital allowances for equipment such as central heating and air conditioning.
If you have any questions about any of these key tax dates and how they may affect you, please get in touch with one of the PT team and we’ll be happy to help.