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
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| 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.
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100% |
| Annual Investment Allowance (AIA) – on first £200,000 of investment to 1 January 2016 (excludes cars and expenditure already qualifying for 100% FYA)
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100% |
| Writing Down Allowance on expenditure not qualifying for AIA or FYA:
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| Long-life assets, integral features of buildings, cars over 130g/km
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8% |
| Other plant and machinery, cars between 75g/km and 130g/km
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18% |
| Business premises renovation allowance
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| Maximum initial allowance
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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
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Financial Year to |
31st March 2019 |
31st March 2018 |
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Corporation Tax Rate |
19% |
19% |
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Special Rate to Unit Trust and Open-ended Investment Companies |
20% |
20% |
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Corporation Tax payment and Filing |
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Corporation tax is due nine months and one day after the end of the accounting period. |
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Some companies are required to pay in quarterly instalments:
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The corporation tax return is normally due one year of the end of the accounting period. |
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Personal allowances (PA) |
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2018-2019 |
2017-2018 |
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born after 5 April 1948 |
£11,850 |
£11,500 |
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born after 5 April 1938 but before 6 April 1948 |
£11,850 |
£11,500 |
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born before 6 April 1938 |
£11,500 |
£11,850 |
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Blind Person Allowance |
£2,320 |
£2,390 |
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Personal savings Allowance For Basic Rate tax payers |
£1,000 |
£1,000 |
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Personal savings Allowance For higher Rate tax payers |
£500 |
£500 |
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Trading Allowance |
£1,000 |
£1,000 |
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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.
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2018-19 |
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Standard threshold |
£325,000 |
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Combined threshold maximum |
£650,000 |
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for married couples and civil partners |
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Rate of tax on balance: |
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Chargeable lifetime transfers |
20% |
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Transfers on, or within, 7 years of death |
40% |
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Lower rate |
36%* |
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Residence nil rate band** |
£125,000 |
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* 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. |
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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: |
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Years before death |
0-3 |
3-4 |
4-5 |
5-6 |
6-7 |
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Tax reduced by |
0% |
20% |
40% |
60% |
80% |
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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. |
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| 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 |
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Class 1 (not contracted out) |
Employer |
Employee |
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| 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 |
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| 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 |
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| Class 3 | Voluntary | £14.65 per week | |||
| Class 4 | Self-employed on profits £8,424 – £46,350 Excess over £46,350 |
9% 2% |
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| Exemption applies if state retirement age was reached by 6 April 2018. | |||||
Income Tax
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2018-2019 |
2017-2018 |
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| 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 |
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| Higher rate | 40% | 40% | ||||||||||||||||||||||||||||||
| Additional rate – taxable income over | Over
£150,001 |
Over
£150,001 |
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| 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%
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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) |
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Other Allowances |
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| 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 | ||||||||||||||||||||||||||||||||
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| 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.
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| 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. |
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| ‘Rent a Room’ exempt on gross annual rent | £7,500 | £7,500 | ||||||||||||||||||||||||||||||
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Pensions |
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| 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%* |
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* unless any forms of previous transitional protection allow a higher amount |
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| 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 | ||||||||||||||||||||||||||||||
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* 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. |
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| 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: |
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| 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. |
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| 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 |
