Tax Rates and Allowances

Tax Rates and Allowances 2018 Budget. Rates may be subject to change – contact us for latest. For general guidance only, no responsibility is taken for action taken or refrained from in consequence of contents below.

Please click on a title below to view the tax rates and allowances tables.

Plant and machinery

 

First Year Allowance (FYA) – on energy saving and environmentally beneficial equipment, electric and low CO2 emission cars up to 75g/km, zero-emission goods vehicles, and natural gas/hydrogen refuelling equipment.

 

100%
Annual Investment Allowance (AIA) – on first £200,000 of investment to 1 January 2016 (excludes cars and expenditure already qualifying for 100% FYA)

 

100%
Writing Down Allowance on expenditure not qualifying for AIA or FYA:

 

Long-life assets, integral features of buildings, cars over 130g/km

 

8%
Other plant and machinery, cars between 75g/km and 130g/km

 

18%
Business premises renovation allowance

 

Maximum initial allowance

 

100%
 
2018-2019 2017-2018
Annual Exemptions
Individuals £11,850 £11,500
Trusts £5,850 £5,650
Entrepreneurs Relief:
Maximum Lifetime Allowance £10m £10m
Rate for qualifying business assets 10% 10%
Individuals and Trust Rates:
Basic and starting rate taxpayers 10% 10%
Higher and additional rate taxpayers 20% 20%
Trusts and Personal representatives 20% 20%

Business taxation

Corporate tax

Financial Year to

31st March 2019

31st March 2018

Corporation Tax Rate

19%

19%

Special Rate to Unit Trust and Open-ended Investment Companies

20%

20%

Corporation Tax payment and Filing

Corporation tax is due nine months and one day after the end of the accounting period.

Some companies are required to pay in quarterly instalments:

  • 7th month after the commencement of the accounting period
  • 10th month after the commencement of the accounting period
  • 13th month after the commencement of the accounting period
  • 16th month after the commencement of the accounting period

The corporation tax return is normally due one year of the end of the accounting period.

Personal allowances (PA)

 

2018-2019

 

2017-2018

born after 5 April 1948

£11,850

£11,500

born after 5 April 1938 but before 6 April 1948

£11,850

£11,500

born before 6 April 1938

£11,500

£11,850

Blind Person Allowance

£2,320

£2,390

Personal savings Allowance

For Basic Rate tax payers

£1,000

£1,000

Personal savings Allowance

For higher Rate tax payers

£500

£500

Trading Allowance

£1,000

£1,000

Property Allowance

£1,000

£1,000

From 6th April 2016, the new personal Savings Allowance results in basic rate tax payers not paying on the first £1,000 of savings income they receive. Higher rate tax payers   do not pay tax on the first £500 savings income; Trading allowance and Property Allowance are introduced on the 6th April 2017, the property allowance only valid when rent a room scheme is not applied. The personal allowance is gradually withdrawn by £1 for every £2 of income over £100,000.

2018-19

Standard threshold

£325,000

Combined threshold maximum

£650,000

for married couples and civil partners

 

Rate of tax on balance:

 

Chargeable lifetime transfers

20%

Transfers on, or within, 7 years of death

40%

Lower rate

36%*

Residence nil rate band**

£125,000

* The lower rate is applied where 10% or more of the net estate is left to charity.

**A new inheritance tax main residence nil-rate band (MRNRB) is introduced from April 2017. The MRNRB will eventually allow for a £175,000 per person transferable allowance for married couples and civil partners when their main residence is passed down to children after their death. The MRNRB is in addition to the existing £325,000 inheritance tax threshold.

All lifetime transfers not covered by exemptions and made within 7 years of death will be added back into the estate for the purpose of calculating the tax payable. Tax attributable to such transfers is then reduced:

Years before death

0-3

3-4

4-5

5-6

6-7

Tax reduced by

0%

20%

40%

60%

80%

Main exemptions:

1.     Most transfers between spouses and civil partners.

2.     The first £3,000 of lifetime transfers in any tax year plus any unused balance from the previous year.

3.     Gifts of up to, but not exceeding, £250 p.a. to any number of persons.

4.     Regular gifts made out of income that form part of normal expenditure and do not reduce the standard of living.

5.     Gifts in consideration of marriage/civil partnership of up to £5,000 by a parent, £2,500 by a grandparent, or £1,000 by any other person.

6.     Gifts to charities, whether made during lifetime or on death.

Pension Contributions weekly Benefit
   2018-2019 2017-2018
Old State Pension- per week
Single person £125.95 £122.3
Addition contributor £75.5 £73.3
New State Pension- per week
Single Person £163.00 £159.55
Statutory Sick Pay £92.05 £89.35
 

Class 1 (not contracted out)

 

Employer

 

Employee

Lower earnings limit £116
Payable on weekly earnings of:
£116-£162 Nil Nil
£162-£ 892 13.8% 12%
Over £892 13.8% 2%
Employment allowance (per employer) £3,000

per year

Over state retirement Employee contribution is generally Nil
Class 1A On relevant benefits 13.8% Nil
Class 1B On PAYE Settlement arrangement 13.8% Nil
Class 2 Self-employed
Limit of net earnings for exception
£2.95 per week
£6,205 per annum
Class 3 Voluntary £14.65 per week
Class 4 Self-employed on profits
£8,424 – £46,350
Excess over £46,350
9%
2%
Exemption applies if state retirement age was reached by 6 April 2018.

 

Income Tax

 

2018-2019

 

2017-2018

Basic Rate Band £34,500 £33,500
Basic rate 20% 20%
Starting rate for savings-0% £5,000 £5,000
Higher rate – taxable income over £34,501-

£150,000

£33,501-

£150,00

Higher rate 40% 40%
Additional rate – taxable income over Over

£150,001

 Over

£150,001

Additional rate 45% 45%
Dividend Allowance £2,000 £5,000
Dividend ordinary rate 7.5% 7.5%
Dividend upper rate 32.5% 32.5%
Dividend additional rate 38.1% 38.1%

 

 

There is 0% starting rate available only for savings income up to £5,000 (for 2017-18 a 0% starting rate available for savings income up to £5,000)

 

Personal allowances (PA)
 

2018-2019

 

2017-2018

born after 5 April 1948 £11,850 £11,500
born after 5 April 1938 but before 6 April 1948 £11,850 £11,500
born before 6 April 1938 £11,500 £11,850
Allowances are withdrawn at the rate of £1 for every £2 by which taxable income exceeds £100,000.

 

 

 

Other Allowances

   2018-2019 2017-2018
Married couple’s allowance (MCA) –

either partner born before 6 April 1935

£835.50 £816.50
Transferable Marriage Allowance –

for spouses/civil partners born after 5 April 1935 and not liable to income tax above the basic rate

£1,185 £1,150
Blind Person Allowance £2,320 £2,390
Personal savings Allowance

For Basic Rate tax payers

£1,000 £1,000
Personal savings Allowance

For higher Rate tax payers

£500 £500
Trading Allowance £1,000 £1,000
Property Allowance £1,000 £1,000
From 6th April 2016, the new personal Savings Allowance results in basic rate tax payers not paying on the first £1,000 of savings income they receive. Higher rate tax payers   do not pay tax on the first £500 savings income; Trading allowance and Property Allowance are introduced on the 6th April 2017, the property allowance only valid when rent a room scheme is not applied.
Withdrawal of allowances
  

   2018-2019 2017-2018
The age-related allowances are progressively withdrawn if income exceeds:
personal allowances (born before 6 April 1948) £27,700 £27,000
Minimum PA £10,600 £10,000
Minimum MCA tax reduction £322 £314
There is a tax charge on child benefit for recipients whose income (or their partner’s) exceeds £50,000. The effect is tapered, so that the tax charge claws back the whole of the child benefit where income exceeds £60,000.

 

 

 

 

 

 

Tax Shelters
   2018-2019 2017-2018
Enterprise Investment Scheme up to £1,000,000* £1,000,000*
Venture Capital Trust up to £200,000* £200,000*
Seed Enterprise Investment Scheme up to £100,000** £100,000**
* Income Tax Relief is given at 30% of the qualifying investment.
** Income Tax Relief is given at 50% of the qualifying investment.
‘Rent a Room’ exempt on gross annual rent £7,500 £7,500
 

 

Pension Contributions 2018-19 2017-18
Lifetime allowance £1,030,000 £1,000,000
Maximum annual contribution £40,000 £40,000
Tax on excess Marginal rate Marginal rate
Normal minimum pension age 55 55
Old State pension – per week** 2018-19  2017-18 
Single person  £125.95 £122.30
 Addition for wife if non-contributor £75.50 £73.30
New State Pension – per week 2018-19  2017-18 
Single person £163.00 £159.55

 

 

 

Pensions

The maximum amount on which an individual can claim tax relief in any tax year is the greater of the individual’s UK relevant earnings or £3,600. If total pension input exceeds the annual allowance of £40,000 (for 2015-16) there is a tax charge on the excess linked to the individual’s highest marginal income tax rate. However, if the annual allowance is exceeded, it is possible to bring forward any unused annual allowance from the 3 previous tax years.
Minimum age for taking benefits 55
Lifetime allowance charge:
applies to cumulative benefits exceeding £1,250,000*
if paid as a lump sum
if paid as taxable income
Maximum tax-free lump sum
55%
25%
25%*
 

* unless any forms of previous transitional protection allow a higher amount

ISA’s
   2018-2019 2017-2018
Cash and shares combined limit £20,000 £20,000
Junior ISA £4,260 £4,128
Lifetime ISA* £4,000 £4,000
Help to Buy ISA** NA NA
 

* You can put in up to £4,000 each year, until you’re 50. The government will add a 25% bonus to your savings, up to a maximum of £1,000 per year.

** If you’re saving to buy your first home, the government will top up your savings by 25% (up to £3,000). If you’re buying with someone else, they can also get a Help to Buy ISA.

 

Income Tax
1st payment on account 31st January 2019
2nd Payment on account 31st July 2019
Balance 31st January 2020
Capital Gains Tax
Payable by 31st January 2020
Tax Returns
Generally due by:
31st October 2019 (Paper)
31st January 2020 (online)
 Residential 2017-18
Value up to £125,000 Nil
£125,001 -£250,000 2%
 £250,001-£925,000 5%
Over £925,001 -£1,500,000 10%
Over £1,500,000 12%
From 4 December 2014, SDLT for residential property is charged at rates depending on the portion of the purchase price that falls within each rate band above.
There is a 15% rate which applies to properties costing over £500,000 bought by companies, and which do not qualify for relief.
Non-Residential  or Mixed use 2017-18
Value up to £150,000 Nil
£150,001-£250,000 2%
Over £250,000 5%
Working Tax Credit: 2018-2019 2017-2018
Basic element £1,960 £1,960
Couple and one parent element £2,010 £2,010
30-hour element £810 £810
Disabled worker element £3,090 £3,000
Severe disability element £1,330 £1,290
Childcare element:
Maximum eligible cost for one child £175pw £175pw
Maximum eligible cost two or more children £300pw £300pw
Per cent of eligible costs covered 70% 70%
Child Tax Credit Rates:
Family element £545 £545
Child element £2,780 £2,780
Disabled child element £3,275 £3,175
Severely disabled child element £4,600 £1,290
Income thresholds:
Income threshold £6,420 £6,420
Withdrawal rate 41% 41%
First threshold for those entitled
to Child Tax Credit only
£16,105  

£16,105

Income rise disregard £2,500 £2,500
Income fall disregard £2,500 £2,500
Child Benefit Rates:
Eldest/Only child £20.70 £20.70
Other Children £13.70 £13.70
Value Added Tax 2018/2019
Standard Rate 20%
VAT Fraction 1/6
Reduced Rate 5%
Current Turnover Limits
Registration – last 12months or next 30 days over £85,000
De-registration – next year under £83,000
Annual Accounting Scheme £1,350,000
Cash Accounting Scheme £1,350,000
Flat Rate Scheme £150,000

 *Companies have to leave the flat rate Scheme once annual taxable turnover exceeds £230,000, or is expected to exceed £230,000 in the next 30 days.

The taxable benefit is calculated as a percentage of the list price of the car, on the day before it was first registered, plus certain accessories. This percentage depends upon the rate at which the car emits carbon dioxide (CO2), and the fuel type.

You can find the appropriate percentage for 2018/19 using the following table:

CO2 emissions
(g/km)
Appropriate percentage
Petrol % Diesel %
0-50 13 17
51-75 16 20
76-94 19 23
95-99 20 24
100-104 21 25
105-109 22 26
110-114 23 27
115-119 24 28
120-124 25 29
125-129 26 30
130-134 27 31
135-139 28 32
140-144 29 33
145-149 30 34
150-154 31 35
155-159 32 36
160-164 33 37
165-169 34
170-174 35
175-179 36
180 and above 37

The diesel supplement is increased from 3% to 4% from 6 April 2018, although the maximum fuel rate remains at 37% (unless the car is registered on or after 1 September 2017 and meets the Euro 6d emissions standard).

Car fuel benefit

Company car fuel benefit is charged unless the cost of all fuel for private use is borne by the employee. The taxable benefit is calculated by applying the appropriate percentage to the car fuel benefit charge multiplier, which is £23,400 in 2018/19.

Where VAT is to be reclaimed on fuel for private use, the employer also has to account for output tax based on a flat rate charge derived from the vehicle’s CO2 emissions.

Fuel-only advisory rates

Engine Size Petrol Diesel Gas
Up to 1400cc 11p 9p 7p
1401cc – 1600cc 14p 8p
1601cc to 2000cc 11p
Over 2000cc 22p 13p 13p
Rates from 1 March 2018 and are subject to change. Note the advisory fuel rates are revised in March, June, September and December. Please contact us for any updated rates.

Company vans

Company van benefit is generally not related to CO2 emissions but is a set figure of £3,350 with an extra £633 where fuel for private use is provided. Van benefit charge for zero emission vans is £1,340. There is no fuel benefit for such vans.

 

 

 

Van and fuel charge Van £ Fuel £ Total £
Tax (20% taxpayer) £670.00 £126.60 £796.60
Tax (40% taxpayer) £1,340.00 £253.20 £1,593.20
Tax (45% taxpayer) £1,507.50 £284.85 £1,792.35
Employer’s class 1A NICs £462.30 £87.35 £549.65

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