New year law changes
SEVERAL PIECES OF LEGISLATION COME INTO
SEVERAL new pieces of legislation come into effect in 2019 which will affect many of our lives to some degree.
There are changes in the law affecting everything from taxation and pensions to pay claims, driving and even drones.
There is some good news in all of this; for example, the minimum wage is rising and you can earn more before you start paying tax.
Pensions will be affected under laws which come into force in 2019, as will savings and pay gaps and pay claims.
Motorists will be affected too as there will be changes for learner drivers, MOTs, vehicle excise duty and overtaking cyclists.
And – apt following alleged incidents of illegal drone use at Gatwick Airport – there will be legislation governing the use of drones.
The National Minimum Wage is going up. Both the National Living Wage (NLW) and National Minimum Wage (NMW) rates will increase in April 2019.
The “living wage”, the effective minimum wage for people aged 25 or over, will rise to £8.21 next April, up from £7.83 an hour now.
For those 21 to 24, it will go up from £7.38 to £7.70.
You’ll keep more of the money you earn before tax. The income tax threshold will increase to £12,500 in April 2019.
In other words, you won’t pay any income tax at all until you earn this much.
Assuming you have an annual income of at least £12,500, you’ll probably pay £130 less tax a year.
And the threshold for the higher rate of income tax – the 40 per cent rate – will increase to £50,000-a-year. It means that some people on higher salaries – more than £46,351-a-year – will also gain another £730 in their pay packets.
However, the most comfortably off won’t get the full benefit, with people making more than £100,000 not benefiting as much – or even at all.
State pension rates are set for huge changes in 2019.
The boost will be implemented from April next year, according to consumer watchdog Which?
Those receiving the basic state pension will get an extra £3.25 a week, increasing the state pension from £125.95 to £129.20.
Retired workers in this group will then have £169 more for the year, which works out as an annual income of £6,718.40.
It’s also good news for those entitled to the full new single-tier state pension.
Those receiving this will see an increase from £164.35 to £168.60 - which means an additional £4.25 a week.
That’s £221 extra by the end of the 2019/2020 tax year, which raises the total annual income to £8,767.20.
There are also changes to the additional state pension rate.
“If you reached state pension age before April 2016, your state pension will be made up of two parts; the basic state pension and the additional state pension - sometimes referred to as the second state pension,” revealed Which?
The additional state pension only increases by the rate of CPI inflation, which was announced in September, rather than being linked to the triple lock guarantee.
This means that the additional state pension will increase only by 2.4% from April 2019.
There remains a cap on the maximum additional state pension you can earn, though this rises from £172.28 per week to £176.41 per week in 2019/2020.
The minimum contributions for autoenrolment pension schemes will increase for employers and employees from April 2019.
Existing rules mean employers must contribute a minimum of 2% of a worker’s pre-tax salary, with the worker contributing 3%.
Under the new rules, employers and employees will now have to contribute a minimum of 3% and 5% respectively.
This means-tested benefit is awarded based on earnings, and from April 2019 both pension credit payments will rise by 2.4%, the CPI rate of inflation.
Guarantee credit, the first part of pension credit, will subsequently increase from £163 a week to £167.25 per week for a single person and from £248.80 to £255.25 for a couple.
The second part, savings credit, will see its cap rise from £13.40 to £13.72 for a single person, and from £14.99 to £15.35 a week for a couple.
For child Isa savers the annual subscription limit for Junior Isas for 201920 will be uprated to £4,368.
The adult Isa annual subscription limit for 2019-20 will remain unchanged at £20,000.
The pension lifetime allowance is the maximum amount that you can put into your retirement savings without being taxed.
It increases based on the rate of CPI inflation, which means that from next year, the pensions lifetime allowance will increase from £1,030,000 to £1,055,000.
According to Which?, this means an extra £24,800 in tax-free pensions savings that you can make.
From April 6, 2019, the legal right to a payslip will be extended to include non-employees such as contractors and freelancers.
Employers will also be obliged to include the total number of hours worked on payslips for employees whose wages vary depending on how much time they have worked.
European workers living in the UK can apply for settled status in 2019, allowing them to remain indefinitely after the end of the Brexit transition period in 2021.
To be granted settled status individuals must prove they have been living in the UK for five years by the date of application.
Those who do not meet this requirement can apply for temporary status, allowing them to remain until they have gained enough residency to be granted settled status.
This couldn’t be more topical considering what happened at Gatwick airport before Christmas.
From November 2019, new drone rules will come into effect, impacting users.
The new laws will make it illegal to fly a drone weighing more than 250g without first registering with the Civil Aviation Authority and passing online safety tests.
Aviation minister Baroness Sugg said in a statement : “Whilst we want this industry to innovate and grow, we need to protect planes, helicopters and their passengers from the increasing numbers of drones in our skies.
“These new laws will help ensure drones are used safely and responsibly.”