Tax Allowance & Wage Updates for 2019

Marriage Allowance

If your income is less than your annual tax allowance of £12,500, you may now be able to transfer up to £1,250 of your unused allowance to your spouse so they pay less tax.

Personal Allowance

The personal allowance increases to £12,500 for 2019/20, up from £11,850 in 2018/19. The personal allowance starts to be tapered off once an individual’s adjusted net income reaches £100,000. By the time this income reaches £125,000 in 2019/20, the personal allowance will be nil. 

Dividend Rates 

There are no changes to the dividend rates of tax which apply to all UK taxpayers. The first £2,000 of dividends is tax free. If you are a basic rate taxpayer, you’ll continue to pay 7.5% tax on dividends over this amount (up to £37,500 on top of the personal allowance).

If you pay higher rate income tax, you’ll pay 32.5% on dividend income between the higher rate threshold and the additional rate threshold of £150,000. 38.1% will be paid on dividend income above the additional rate threshold of £150,000. 

The National Living Wage is Increasing

In April, the National Living Wage will increase by 4.9% from £7.83 to £8.21.