5 legal changes for your business in 2019 (and what you need to do to comply)

A gavel is seen on a blue background. It is a legal reference.

With the Autumn Budget now a distant memory, you could be forgiven for struggling to recall what’s in store for your business this year. Here’s a quick refresher to get you back up to speed.

1. Making Tax Digital for VAT

For: VAT-registered businesses

From: 1st April

The government’s ambitious plan to digitise tax for everyone in the UK begins this April with MTD for VAT. The new rules will require businesses with a taxable turnover above the VAT threshold to store financial records digitally and submit VAT returns from MTD-compatible accounting software.

If you’re already using FreeAgent then you don’t need to worry – we’ve been working closely with HMRC to ensure filing VAT returns from the software is as simple as before.

Need some help getting your business ready for MTD, or just want to find out more? Check out our MTD guides and resources.

Action required: Make sure your business is using MTD for VAT-compatible software, like FreeAgent, before the deadline.

2. Minimum wage increase

For: All employers

From: 1st April

The National Living Wage (the lowest wage that you can pay workers aged 25 or over) is increasing from £7.83/hour to £8.21/hour at the start of April. The National Minimum Wage for younger workers is also going up. Here’s a table with all the changes you should know about for each age group:

Employee ageHourly rate 2017-18Hourly rate 2019-20
21 - 24£7.38£7.70
18 - 20£5.90£6.15
16 - 17£4.20£4.35

The hourly rate for apprentices is also increasing from £3.70 to £3.90.

Action required: Check your payroll records to see if you need to increase any employees’ wages and make sure your business can afford to do so. See this guide on the National Living Wage and National Minimum Wage to find out more.

3. Annual Investment Allowance (AIA) increased

For: All businesses

From: 1st January 2019

At the moment, businesses can claim tax relief on the cost of qualifying capital assets up to a limit of £200,000 a year – this is called the Annual Investment Allowance (AIA).

From 1st January 2019 to 31st December 2020 the allowance will be increased to £1 million a year.

Action required: Calculate the cost of all your business’s eligible assets for AIA using the new limit. Check what assets are eligible for AIA in this guide from HMRC.

4. Business rates to be cut for small retail businesses

For: Businesses paying rates on retail property

From: 1st April 2019

From April, business rate bills will be cut by a third for retail properties with a rateable value (the value of a business’s property for tax purposes) below £51,000 for two years. The government says this will benefit 90% of retail properties.

Action required: There isn’t anything you need to do here if the change affects your business – except think of what you’ll do with the money you’ve saved. Perhaps you could invest it back into your business!

5. Brexit

For: All businesses

From: 29th March

There are bound to be a lot of legal changes in the run-up to and following Brexit, but unfortunately we don’t know what these are yet!

One pointer we can give you is to keep a close eye out for how any outcome will impact your business – particularly if you sell or buy goods to or from the EU. If you’re concerned about how Brexit will impact your business it’s a good idea to get in touch with your accountant.

Action required: We don’t know what action you’ll need to take just yet so it’s a good idea to look out for any news on what you’ll need to do. As always, we’ll keep you updated, so why not join our mailing list?

Looking for a better way to keep your business compliant this year? FreeAgent’s award-winning accounting software can help!

Disclaimer: The content included in this blog post is based on our understanding of tax law at the time of publication. It may be subject to change and may not be applicable to your circumstances, so should not be relied upon. You are responsible for complying with tax law and should seek independent advice if you require further information about the content included in this blog post. If you don't have an accountant, take a look at our directory to find a FreeAgent Practice Partner based in your local area.

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