Welcome to the 2019/20 tax year - here's what's changed

Story

The 2019/20 tax year kicked off on 6 April 2019, and with it comes a wave of changes you need to know about. We’ve summed up the most important updates below to ensure you’re prepared for the new tax year.

What’s changed?

  • Income tax – the amount you can earn before you need to pay basic rate tax at 20% - also known as a ‘personal allowance’ - has increased from £11,850 to £12,500. If you’re a higher rate tax payer (40%), the amount you can earn has increased from £46,350 to £50,000 before the higher rate kicks in.
  • ISAs – the amount you can save tax-free in an Individual Savings Account (ISA) remains at £20,000 for the 2019/20 tax year. This includes cash ISAs and stocks and shares ISAs.
  • Tax reliefs and allowances

    - Capital gains tax: this is a tax you pay on the profit you make when you sell something that has increased in value. The tax-free allowance has increased from £11,700 to £12,000.

    - Annual allowance: the amount you can pay into your pension while still receiving tax relief remains at £40,000.

    - Lifetime allowance: this is the limit on the amount of pension benefit you can draw from pension schemes (lump sum or retirement income), and can be paid without triggering an extra tax charge. This has increased from £1.03 million to £1.055 million for the 2019/20 tax year

    • Auto-enrolment minimum contributions – the employer minimum contribution has increased to 3%, staff contribution to 5%, which means the total minimum contribution is now 8%.
  • What do I need to do?

    We previously talked about preparing for the new tax year, the top three allowances  you need to consider maximising, and how best to plan for disinvesting. But the beginning of a new tax year could mean checking in with your adviser if you already have one, or seeking financial advice to ensure you’re fully informed about how the 2019/20 tax year changes could affect you or your business.

    A qualified financial adviser will assess your situation and make recommendations based on your circumstances. AFH advisers are independent, which means we take a whole-of-market approach to provide solutions tailored specifically to you. You should always seek professional advice before taking any course of action.

News

Find all the latest industry news, all written by our in-house industry experts.

Is a buy-to-let investment worth it?

Is a buy-to-let investment worth it?

Story 23/04/19

Multiple tax changes and the uncertainty surrounding Brexit hasn’t played in landlords’ favour, deeming a buy-to-let portfolio somewhat risky. But is all really lost?

Monthly economic commentary: April 2019

Monthly economic commentary: April 2019

Commentary 18/04/19

Our chief economist, Colin Warren, looks at what’s causing investors to become increasingly cautious over the possibility of a US recession in his latest economic commentary.

Relevant life plans: is your business missing out?

Relevant life plans: is your business missing out?

Story 03/04/19

Most people pay for life insurance on an individual basis. But, if you’re a company director, an alternative option could potentially save you thousands of pounds in insurance premiums.

More articles

Get in touch

To discover how AFH's unique approach to wealth management can help you build a better future, please contact us.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.