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Budget 2018

In his Budget speech of 20 February 2018, the Minister for the Treasury, the Hon A L Cannan, MHK, announced various taxation and National Insurance measures.

Following the Budget, the Income Tax Division of Treasury published the following Practice Notes:

PN 199/18 – Budget 2018 – Income Tax and National Insurance Proposals

PN 200/18 – Cycle to Work Scheme – Benefit in Kind exemption

PN 201/18 – Pension Changes

PN 202/18 – 2018 Budget Changes: Payments to participators relating to sales of goodwill or unquoted shares

Budget 2018 - Tax and National Insurance headlines

  • The income tax lower rate for individuals remains at 10% and the higher rate at 20%
  • The income tax personal allowance is increased to £13,250 for a resident individual and £26,500 for a jointly assessed couple
  • The threshold at which the higher rate becomes payable remains at £6,500 for an individual and £13,000 for a jointly assessed couple
  • Aggregate value of general benefits in kind that will not be charged to income tax is increased from £400 to £600 per year
  • The benefit in kind exemption introduced in the 2017 Budget for employers providing employees with bikes and related safety equipment for use between their home and place of work is extended to include certain types of electrically assisted bikes
  • Legislation introduced to allow for a new pension product – the new product permits a member aged 55 or over to take a tax-free lump sum of 40% and also to have full access to the remaining funds as and when required
  • Tax relief on existing schemes including the new pension product is set at £50,000 from 6 April 2018
  • The trivial commutation lump sum limit and the level of fund remnant for any pension scheme are increased to £100,000
  • The Lower Earnings Limit for Primary Class 1 National Insurance contributions is increased to £116 per week

  • The Class 3 National Insurance contribution is increased to £14.65 per week

Treasury Pink Book 2018/19

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