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It’s almost that time of year again, the start of a new tax year. It’s the time when promises made in the Autumn Budget and the previous year finally come to fruition. We’ve put together a list of things to look out for that may affect the way you run your business.

Pension contributions

Pension contributions will be increasing on 6 April 2018 as part of the government’s auto-enrolment scheme. Currently, employers are expected to contribute 1% of an employee’s salary to a pension pot, while they contribute another 1% taken directly from their salary. This will be increasing to 2% contributions for employers and 3% from your employees. This is set to rise to 3% and 5% in April 2019.

If you’re not already contributing, you need to check whether your circumstances have changed which will make you liable this year.

Personal allowance

The amount an employee can earn before they have to pay income tax is increasing from £11,500 to £11,850.

This means as an employer, you’ll have to make sure your payroll staff and software are ready for the changes by April.

Car tax

This won’t just affect business owners but is definitely worth bearing in mind if you travel a lot as part of your business or use company vehicles.

After the shake-up of Vehicle Excise Duty, also known as car tax, last year, there are more changes on the way this year. However this year’s changes will only apply to diesel engines.

From April, new diesel cars will be moved up one tax band. This is unless they meet the latest Euro 6 standard, under real driving emissions (RDE2) testing. Currently no new diesels meet the RDE2 standard so if you’ve got a diesel, you’ll see an increase in tax.

The change will affect vehicles in the first year with what is also known as “showroom tax”. This is calculated on a vehicle’s CO2 emissions. The tax increases will range between £20 for some vehicles to more than £500 for others.

The company car tax levied on diesels will also be increasing from 3% to 4%. However, the new first year rates will only apply to cars, not vans or other commercial vehicles, which could be a silver lining if you’ve got a fleet of business vans.

 

What do you think of the changes this tax year? Would you like to see others? Please share your thoughts in the comments.

 

About The Author

Kara Copple

An experienced business and finance writer, sometimes moonlighting as a fiction writer and blogger.

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