Other key changes for 2018/19

A number of other key changes are coming into effect during 2018, which may have an impact on your business and personal finances.

Dividend Allowance set to reduce

The Dividend Allowance is set to be reduced from £5,000 to £2,000 from 6 April 2018, just two years after it was first introduced. The stated aim of the move is to ‘address the unfairness’ around the director-shareholders’ tax advantage, as well as what the Chancellor described as the ‘extremely generous tax break for investors with substantial share portfolios’.

Changes to car fuel benefit rates

From April 2018 the benefit-in-kind rates for cars will increase significantly, with further rises planned in 2019 and 2020. The increases are likely to result in cost rises for employers providing company cars to their employees.

In addition, from 6 April 2018, the taxable diesel car benefit for diesel cars will rise from 3% to 4%, although the maximum fuel rate remains at 37% (unless the car is registered on or after 1 September 2017 and meets the Euro 6d emissions standard).

Compulsory employer pension contributions to rise

The pensions auto-enrolment legislation currently requires employers to contribute at least 1% on the qualifying pensionable earnings for eligible jobholders. From 6 April 2018 this will rise to 2%, with a further rise to 3% planned in April 2019.

Residence Nil-Rate Band rises

The inheritance tax Residence Nil-Rate Band (RNRB), introduced in April 2017, will rise from £100,000 in 2017/18 to £125,000 for the 2018/19 tax year. The RNRB is designed to enable a ‘family home’ to be passed wholly or partially tax-free on death to direct descendants such as children or grandchildren. It will continue to increase in increments to reach £175,000 in 2020/21.

The new General Data Protection Regulation

The new General Data Protection Regulation (GDPR) is set to come into effect on 25 May 2018, and will require all organisations that deal with individuals living in an EU member state to protect the personal information belonging to those individuals, and have verified proof of such protection. With financial penalties for non-compliance of up to €20 million or 4% of total annual worldwide revenue, businesses are being urged to make sure they are prepared for the regulations.

Southampton Office

12-14 Carlton Place
Southampton
Hampshire
SO15 2EA

Tel: 02380 234 222

Winchester Office

6 Charlecote Mews
Staple Gardens
Winchester
SO23 8SR

Tel: 01962 842000

Reading Office

3 Richfield Place
Richfield Avenue
Reading, Berkshire
RG1 8EQ

Tel: 0118 9511 115

London Office

90 Long Acre
Covent Garden
London
WC2E 9RZ

Tel: 0203 470 0777