Budget 2018: What We Know Already

With only a few days until Budget 2018 on 29 October, it’s still hard to say what kind of surprises might be in store.

However, there are a few changes already set in stone for the 2019/20 tax year. Here’s what we know already.

Auto-Enrolment

Under auto-enrolment rules, employers are required to enrol eligible staff into a workplace pension.

The minimum contribution will rise to 8% of the employee’s qualifying earnings from 6 April 2019, with employers putting in 3% and employees contributing 5%.

Fuel Duty

Prime Minister Theresa May has already announced that fuel duty will remain frozen in 2019/20.

It will stay at its current rate of 57.95p per litre of petrol, diesel, biodiesel or bioethanol.

Family Home Allowance

The residence nil-rate band, also known as the family home allowance, was introduced to allow people to pass on their family home to direct descendants and save on inheritance tax.

The third increase in a series of four to affect this band will see this rise to £150,000 in 2019/20.

Mortgage Interest Relief

Most buy-to-let landlords are seeing the amount of tax relief they can claim on mortgage interest payments phased out over the course of four years.

This process began in April 2017 and landlords will only be able to offset 25% of their mortgage interest payments against their rental profits from 5 April 2019.

Eventually, they will only be able to claim a new tax credit at the basic rate of tax (20%).

National Living Wage

Any changes to the national minimum wage and national living wage in April 2019 will be announced in Budget 2018.

This is currently set at £7.83 an hour, although a Low Pay Committee consultation said in June 2018 that forecasts project this rise to £8.20 from 5 April 2019.

Contact Taylorcocks to talk about your business and personal finances.