REMINDER – TAX BANDS IN THE NEW TAX YEAR (2019/20)!

Here are the new Income Tax bands that come into force from the 6th of April:

• Personal Tax Allowance - £12,500

This is the amount that an individual can earn before he pays any tax at all.

• Basic Rate Taxpayer (20%) - £37,500

This is the amount of earnings over the £12,500 that an individual would pay 20% tax on. So you would have to earn in excess of £50,000 before you started paying higher rate tax.

• Higher Rate Taxpayer (40%)

This is the amount over and above the Personal Tax Allowance and the Basic Rate. 40% tax would be charged on earnings from £50,000 to £150,000.

• Above that is the Additional Rate of Tax, i.e. 45%. So earnings over £150,000 would be charged at 45%.

Other tax matters to note are as follows:

Capital Gains Tax Exemption - £12,000

Inheritance Tax Nil-rate Band - £325,000

(unchanged from last year)

Rent-a-room relief - £7,500 per annum

(unchanged from last year)

Pension Lifetime Allowance - £1,055,000

Annual Pension Allowance - £40,000

(subject to earnings)