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10 | Upcoming changes
UPCOMING CHANGES
DIVIDENDS
The tax-free dividend allowance will reduce from
£5,000 to £2,000 from 6 April 2018.
INCOME TAX RATES
The bands and rates at which people in Scotland
pay income tax have been changed for 2018/19, but
it will be business as usual for taxpayers in the rest
of the UK.
The following income tax bands and thresholds
will be in place from 6 April 2018 (table 1,2 and 3
next page).
AUTO-ENROLMENT
Businesses need to be aware that from 6 April 2018,
the minimum employer contribution towards an
employee’s workplace pension will increase from
1% to 2%.
These contributions are usually mandatory for
workers aged between 22 and state pension age,
earning more than £10,000 a year.
NATIONAL LIVING WAGE AND NATIONAL
MINIMUM WAGE
National minimum wage rates for all ages and
apprentices are increasing from 1 April 2018.
For 18 to 20-year-olds and 21 to 24-year-olds, it will
be the largest increase in a decade.
National living wages and national minimum
wages rates
•
25 and over - £7.83
•
21-24 - £7.38
•
18-20 - £5.90
•
Under 18 - £4.20
•
Apprentice* - £3.70
PENSIONS
Pensions escaped an overhaul in Autumn Budget
2017 as the chancellor opted to leave the current
system unchanged, apart from an increase to the
lifetime allowance.
The lifetime allowance, which is the maximum
amount an individual can draw from pensions
without incurring extra tax charges, rises to
£1.03 million from 6 April 2018.
ISAS
The overall annual ISA subscription limit remains
at £20,000, although the Junior ISA allowance
increases to £4,260 from 6 April 2018.
The £20,000 limit may also be used to invest in a
Lifetime ISA, which has a maximum allowance in
2018/19 of £4,000.
* If under 19 or in irst year of apprenticeship.