[UK] New pension, wage and tax laws in effect [UK] New pension, wage and tax laws in effect

[UK] New pension, wage and tax laws in effect
24 Apr 2019

This month eleven new laws with the potential to impact your financial life come into effect,Manchester Evening News reports.


Here are the key legislative changes to be aware of:

National Minimum Wage increases

  • The National Living Wage (NLW) and National Minimum Wage (NMW) have increased

  • The NLW for people aged 25 or over rose from £7.83 per hour to £8.21

  • The NMW for people aged 21 to 24 rose from £7.38 per hour to £7.70

State pensions

  • State pension rates changed from April 6 after the tax year end

  • People receiving the basic state pension will get an extra £3.25 a week

  • The state pension increases from £125.95 to £129.20

  • Entitled retired workers will have £169 more per year, an annual income of £6,718.40.

Single-tier state pension

  • People entitled to the new single-tier state pension receive an additional £4.25 a week

  • This pension increases from £164.35 to £168.60

  • Recipients will have £221 extra by the end of the 2019/2020 tax year

  • The total annual income rises to £8,767.20.

Additional state pension rate changes

Which? revealed that, "If you reached state pension age before April 2016, your state pension will be made up of two parts; the basic state pension and the additional state pension - sometimes referred to as the second state pension."

  • The additional state pension increases by the rate of CPI inflation (announced in September) it is not linked to the triple lock guarantee

  • The additional state pension will increase only by 2.4%

  • A cap on the maximum additional state pension people can earn remains

  • This rises from £172.28 per week to £176.41 per week in 2019/2020.

Work pensions

Minimum contributions for auto-enrolment pension schemes will rise for employees and employers.

Work pension changes


  • Under the previous rules employers contributing a minimum of 2% of a worker's pre-tax salary, the worker contributes 3%

  • Under the new rules, employers and employees will respectively contribute a minimum of 3% and 5%

Pension credit

  • This is a means-tested benefit with awards based on earnings

  • Both pension credit payments have risen by 2.4%, the CPI rate of inflation

  • Guarantee credit increases from £163 a week to £167.25 per week for a single person and from £248.80 to £255.25 for a couple

  • The Savings credit cap rises from £13.40 to £13.72 for a single person and from £14.99 to £15.35 a week for a couple

Pension contributions

  • Minimum contributions for auto-enrolment pension schemes have increased for employers and employees

  • Under the past rule, employers had to contribute a minimum of two per cent of a worker’s pre-tax salary, with the worker contributing three per cent

  • Now employers and employees must respectively contribute a minimum of three per cent and five per cent

Income tax threshold increase


  • The income tax threshold increases to £12,500, employees won't pay any income tax at all they earn a certain amount

  • An annual income of at least £12,500 now incurs £130 less tax a year

  • The threshold for the higher rate of income tax - the 40% rate - increases to £50,000-a-year

  • People earning over £46,351-a-year gain another £730

Payslips

Non-employees like contractors and freelancers now have a legal right to a payslip.

Employers must now include a total for the number of hours worked on payslips for employees whose wages vary depending on the hours they do.

Business VAT rules


All VAT-registered businesses with taxable turnover above the VAT registration threshold must keep digital VAT records and file their VAT returns using the software.

Statutory Sick Pay

  • The qualifying criteria for statutory sick pay (SSP) and amount of money staff are entitled to have changed

  • Individuals must earn a minimum of £118 per week to qualify for weekly payments of £94.25

  • The maternity, paternity, adoption and shared parental pay rates have risen to £148.68 per week

Pay gap reporting

Private organisations with 250+ employees must publish their gender pay gap figures on April 4.

New legislation requires companies with more than 250 employees to publish their executive pay gap.

Tribunal pay-outs   

The amount of money employees could receive from a successful tribunal claim increased on April 6, 2019.

Successful claims for unfair dismissal can now receive a maximum compensation payout of £102,194.

OTHER STORIES THAT MAY INTEREST YOU

What Lies Ahead For UK Pensions?

Pension Freedoms: What Employers Need To Know

UK Nest Trials New UK Pensions Savings Model

This month eleven new laws with the potential to impact your financial life come into effect,Manchester Evening News reports.


Here are the key legislative changes to be aware of:

National Minimum Wage increases

  • The National Living Wage (NLW) and National Minimum Wage (NMW) have increased

  • The NLW for people aged 25 or over rose from £7.83 per hour to £8.21

  • The NMW for people aged 21 to 24 rose from £7.38 per hour to £7.70

State pensions

  • State pension rates changed from April 6 after the tax year end

  • People receiving the basic state pension will get an extra £3.25 a week

  • The state pension increases from £125.95 to £129.20

  • Entitled retired workers will have £169 more per year, an annual income of £6,718.40.

Single-tier state pension

  • People entitled to the new single-tier state pension receive an additional £4.25 a week

  • This pension increases from £164.35 to £168.60

  • Recipients will have £221 extra by the end of the 2019/2020 tax year

  • The total annual income rises to £8,767.20.

Additional state pension rate changes

Which? revealed that, "If you reached state pension age before April 2016, your state pension will be made up of two parts; the basic state pension and the additional state pension - sometimes referred to as the second state pension."

  • The additional state pension increases by the rate of CPI inflation (announced in September) it is not linked to the triple lock guarantee

  • The additional state pension will increase only by 2.4%

  • A cap on the maximum additional state pension people can earn remains

  • This rises from £172.28 per week to £176.41 per week in 2019/2020.

Work pensions

Minimum contributions for auto-enrolment pension schemes will rise for employees and employers.

Work pension changes


  • Under the previous rules employers contributing a minimum of 2% of a worker's pre-tax salary, the worker contributes 3%

  • Under the new rules, employers and employees will respectively contribute a minimum of 3% and 5%

Pension credit

  • This is a means-tested benefit with awards based on earnings

  • Both pension credit payments have risen by 2.4%, the CPI rate of inflation

  • Guarantee credit increases from £163 a week to £167.25 per week for a single person and from £248.80 to £255.25 for a couple

  • The Savings credit cap rises from £13.40 to £13.72 for a single person and from £14.99 to £15.35 a week for a couple

Pension contributions

  • Minimum contributions for auto-enrolment pension schemes have increased for employers and employees

  • Under the past rule, employers had to contribute a minimum of two per cent of a worker’s pre-tax salary, with the worker contributing three per cent

  • Now employers and employees must respectively contribute a minimum of three per cent and five per cent

Income tax threshold increase


  • The income tax threshold increases to £12,500, employees won't pay any income tax at all they earn a certain amount

  • An annual income of at least £12,500 now incurs £130 less tax a year

  • The threshold for the higher rate of income tax - the 40% rate - increases to £50,000-a-year

  • People earning over £46,351-a-year gain another £730

Payslips

Non-employees like contractors and freelancers now have a legal right to a payslip.

Employers must now include a total for the number of hours worked on payslips for employees whose wages vary depending on the hours they do.

Business VAT rules


All VAT-registered businesses with taxable turnover above the VAT registration threshold must keep digital VAT records and file their VAT returns using the software.

Statutory Sick Pay

  • The qualifying criteria for statutory sick pay (SSP) and amount of money staff are entitled to have changed

  • Individuals must earn a minimum of £118 per week to qualify for weekly payments of £94.25

  • The maternity, paternity, adoption and shared parental pay rates have risen to £148.68 per week

Pay gap reporting

Private organisations with 250+ employees must publish their gender pay gap figures on April 4.

New legislation requires companies with more than 250 employees to publish their executive pay gap.

Tribunal pay-outs   

The amount of money employees could receive from a successful tribunal claim increased on April 6, 2019.

Successful claims for unfair dismissal can now receive a maximum compensation payout of £102,194.

OTHER STORIES THAT MAY INTEREST YOU

What Lies Ahead For UK Pensions?

Pension Freedoms: What Employers Need To Know

UK Nest Trials New UK Pensions Savings Model

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