There were some changes to personal tax announced in the Autumn Budget on 29 October 2019; we have pulled out some of the key points, so you have a concise summary.
Personal Allowance
The personal allowance will increase in 2019/20 to £12,500. This is currently £11,850.
In 2019/20 there will be no personal allowance where adjusted income exceeds £125,000
Marriage Allowance
The marriage allowance has remained the same as last year. However, the marriage allowance permits certain couples, where neither pays tax at more than the basic rate, to transfer 10% of their personal allowance to their spouse or civil partner. In some cases, this claim can be backdated to 2015/16, so it's checking if you are eligible.
Tax Bands and rates
The government has announced that for 2019/20 the basic rate band will be increased to £37,500 so that the threshold at which the 40% band applies is £50,000 for those who are entitled to the full personal allowance. The additional rate of tax of 45% remains payable on taxable income above £150,000.
Tax on dividends
The Dividend Allowance will remain at £2,000 for 2019/20. Dividends received above the allowance are taxed at the following rates:
- 7.5% for basic rate taxpayers
- 32.5% for higher rate taxpayers
- 38.1% for additional rate taxpayers.
Tax on savings
The Savings Allowance remains the same next year. Individuals taxed at up to the basic rate of tax have an allowance of £1,000. For higher rate taxpayers the allowance is £500. No allowance is due to additional rate taxpayers.
Rent a room relief
Rent-a-room relief stays the same next year. This gives relief from income tax for up to £7,500 of income to individuals who let furnished accommodation in their only or main residence.
Gift aid – donor benefits
From 6 April 2019, the benefit threshold for the first £100 of the donation will remain at 25% of that amount. For gifts exceeding £100, charities can offer benefits up to the sum of £25 and 5% of the amount of the donation that exceeds £100 — the total value of the benefit that a donor can receive remains at £2,500.
We hope you find this summary useful if you have any questions about your personal tax, then please do get in touch by calling 01623 490 120 or email