Tax Rates Report 13th March 2017
Contents
For quick navigation through this post, please click on the links below.
- Introduction
- Income Tax
- Capital Gains Tax
- Corporation Tax
- Capital Allowances
- Value Added Tax
- Inheritance Tax
- Vehicle Benefits
- Mileage Allowances
- Key Dates and Deadlines
- Pension Contributions
- Individual Savings Accounts (ISAs)
- Some Useful Rates
- Stamp Taxes
- Land and Buildings Transaction Tax (LBTT)
- Welsh Land Transaction Tax (LTT)
Introduction
Our Tax Rates Centre provides a summary of some of the essential tax rates, dates and figures for 2018/19.
2018/19 Tax Rates Centre is for guidance only and professional advice should be obtained before acting on any information contained as no responsibility can be accepted for loss occasioned as a result of action taken or refrained from in consequence of its contents.
Income Tax
Income tax rates (other than savings and dividend income)
| 2018/19 | 2017/18 | ||
|---|---|---|---|
| Band £ | Rate % | Band £ | Rate % |
| 0 – 34,500 | 20 | 0 – 33,500 | 20 |
| 34,501 – 150,000 | 40 | 33,501 – 150,000 | 40 |
| Over 150,000 | 45 | Over 150,000 | 45 |
Scotland income tax rates (savings and dividend income are taxed using UK rates and bands)
| 2018/19 | 2017/18 | ||
|---|---|---|---|
| Band £ | Rate % | Band £ | Rate % |
| 0 – 2,000 | 19 | 0 – 31,500 | 20 |
| 2,001 – 12,150 | 20 | 31,501 – 150,000 | 40 |
| 12,150 – 31,580 | 21 | Over 150,000 | 45 |
| 31,581 – 150,000 | 41 | ||
| Over 150,000 | 46 | ||
| Savings income | 2018/19 and 2017/18 |
|---|---|
| Starting rate for savings | 0% |
| Starting rate limit for savings | £5,000 |
Not available if the taxable non-savings income exceeds the starting rate band. £1,000 of savings income for basic rate taxpayers (£500 for higher rate) may be tax free.
| Dividend income | 2018/19 and 2017/18 |
|---|---|
| Dividend ordinary rate | 7.5% |
| Dividend upper rate | 32.5% |
| Dividend additional rate | 38.1% |
The first £2,000 (£5,000 2017/18) of dividends are tax free.
Personal allowance (PA)
| 2018/19 | 2017/18 | |
|---|---|---|
| Personal allowance | £11,850 | £11,500 |
| (Reduce personal allowance by £1 for every £2 of adjusted net income over £100,000.) 10% of the PA may be transferable between certain spouses where neither pay tax above the basic rate, known as the marriage allowance. | ||
| Marriage allowance | £1,185 | £1,150 |
| Married couple’s allowance (MCA) (relief 10%) (Either partner born before 6 April 1935.) Min amount | £8,695 £3,360 | £8,445 £3,260 |
| (Reduce MCA by £1 for every £2 of adjusted net income over £28,900 (£28,000 2017/18). | ||
| Blind person’s allowance | £2,390 | £2,320 |
Capital Gains Tax
| Capital gains tax rates and bands for 2018/19 | |
|---|---|
| On chargeable gains | |
| Total taxable income and gains: Up to higher rate threshold From higher rate threshold | 10%* 20%* |
| Trust rate *Higher rates (18%/28%) may apply to the disposal of certain residential property and carried interest. | 20%* |
| Annual exemption | |
| – individual | £11,700 |
| – most trustees | £5,850 |
| Transfers between spouses or civil partners living together are generally exempt. | |
Entrepreneurs’ Relief and Investors’ Relief
Qualifying gains will be taxed at 10%. Claims may be made on more than one occasion up to a ‘lifetime’ total of £10 million per relief.
Corporation Tax
| Financial Year to | 31 March 2019 | 31 March 2018 |
|---|---|---|
| Corporation Tax rate | 19% | 19% |
Capital Allowances
Plant and Machinery:
| Investment for use in Enterprise Zones, energy saving and environmentally beneficial equipment, new low CO2 emission cars (up to 50g/km from 1 April 2018), natural gas/hydrogen refuelling equipment: First year allowance (FYA). | 100% |
| Annual investment allowance (AIA) – on the first £200,000 of investment (excludes cars and other 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 110g/km from 1/6 April 2018 | 8% |
Other plant and machinery | 18% |
Value Added Tax
| From | 1 April 2018 |
|---|---|
| Standard rate | 20% |
| VAT fraction | 1/6 |
| Reduced rate | 5% |
| Current Turnover Limits | |
| Registration – last 12 months or next 30 days over | £85,000 |
| Deregistration – next 12 months under | £83,000 |
| Cash accounting scheme – up to | £1,350,000 |
| Optional flat rate scheme – up to | £150,000 |
| Annual accounting scheme – up to | £1,350,000 |
VAT on fuel for private use in cars
Where businesses wish to reclaim the input VAT on fuel which has some degree of private use, they must account for output VAT for which they may use the flat rate valuation.
The table shows the VAT chargeable for quarters commencing on or after 1 May 2017. Please contact us for any updated rates.
| CO2 emissions (g/km) | Quarterly VAT | |
|---|---|---|
| Flat Rate Valuation £ | VAT on Charge £ | |
| 120 or less | 140 | 23.33 |
| 125 | 211 | 35.17 |
| 130 | 224 | 37.33 |
| 135 | 238 | 39.67 |
| 140 | 252 | 42.00 |
| 145 | 267 | 44.50 |
| 150 | 281 | 46.83 |
| 155 | 295 | 49.17 |
| 160 | 309 | 51.50 |
| 165 | 323 | 53.83 |
| 170 | 337 | 56.17 |
| 175 | 351 | 58.50 |
| 180 | 365 | 60.83 |
| 185 | 379 | 63.17 |
| 190 | 393 | 65.50 |
| 195 | 408 | 68.00 |
| 200 | 422 | 70.33 |
| 205 | 436 | 72.67 |
| 210 | 449 | 74.83 |
| 215 | 463 | 77.17 |
| 220 | 478 | 79.67 |
| 225 or more | 492 | 82.00 |
Inheritance Tax
| 2018/19 | 2017/18 | |
|---|---|---|
| Standard threshold | £325,000 | £325,000 |
| A further nil rate band of £125,000 may be available in relation to current or former residences. Nil rate bands of surviving spouses/civil partners may be increased by unused nil rate bands of deceased spouses/civil partners. | ||
| Rate of tax on balance: | ||
| Chargeable lifetime transfers Transfers on, or within 7 years of, death | 20% *40% | 20% *40% |
| * A lower rate of 36% applies where 10% or more of a deceased person’s net estate is left to charity | ||
All lifetime transfers not covered by exemptions and made within seven 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 subject to Taper Relief:
| Years before death | 0-3 | 3-4 | 4-5 | 5-6 | 6-7 |
|---|---|---|---|---|---|
| Tax reduced by | 0% | 20% | 40% | 60% | 80% |
| Main Reliefs | |
|---|---|
| Business property: | |
| – business or interest therein | 100% |
| – qualifying shareholdings in unquoted* companies | 100% |
| – land, buildings, machinery, or plant used by transferor’s controlled company or partnership | 50% |
| Agricultural property | 100% or 50% |
| *Unquoted companies include those listed on AIM | |
Main Exemptions
- Most transfers between spouses and civil partners.
- The first £3,000 of lifetime transfers in any tax year plus any unused balance from previous year.
- Gifts of up to but not exceeding £250 p.a. to any number of persons.
- Gifts in consideration of marriage or civil partnership of: up to £5,000 by a parent, up to £2,500 by a grandparent or great grandparent, or up to £1,000 by any other person.
- Gifts made out of income that form part of normal expenditure and do not reduce the standard of living.
- Gifts to charities, whether made during lifetime or on death.
Vehicle Benefits
Chargeable on directors and employees.
Car Benefit
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 |
Mileage Allowances
It is quite normal practice for employees to be reimbursed at a reasonable mileage rate for business use of their own vehicles. The income tax and national insurance contributions (NICs) position is as follows:
| A statutory system of Approved Mileage Allowance Payments (AMAPs) applies for employees using their own vehicles for business journeys, as follows: | |
|---|---|
| Cars and vans: on the first 10,000 miles in the tax year on each additional mile above this | 45p per mile 25p per mile |
| Motorcycles | 24p per mile |
| Bicycles | 20p per mile |
Unless the employee is reimbursed at a rate higher than the AMAP, the payments do not need to be reported on a P11D. If the employer pays less than these rates, it is possible for the employee to claim income tax relief for the shortfall.
Rates of up to 5p per mile, per passenger, are also tax and NICs free when paid for the carriage of fellow employees on the same business trip. This also covers volunteers who drive for hospital car services etc, even though they are not strictly employees.
National Insurance Contributions
| Class 1 | Employee (primary) |
|---|---|
| Payable on weekly earnings of | |
| Below £116 (lower earnings limit) | Nil |
| £116 – £162 (primary threshold) | 0%* |
| £162.01 – £892 (upper earnings limit) | 12%** |
| Above £892 | 2%** |
| * No NICs are actually payable but notional Class 1 NIC is deemed to have been paid; this protects certain state benefit entitlements. ** Over state pension age, the employee contribution is generally nil | |
| Employer (secondary) | |
| Up to £162 (secondary threshold) | Nil |
| Above £162 | 13.8% |
| £162.01 – £892 (upper secondary threshold – under 21s) | 0% |
| £162.01 – £892 (apprentice upper secondary threshold for under 25s) | 0% |
| Employment Allowance | Up to £3,000 (per year) |
| Class 1A (on relevant benefits) | 13.8% |
| Class 1B (on PAYE settlement arrangement) | 13.8% |
| Class 2 (Self employed) | £2.95 per week |
| Small profits threshold | £6,205 per annum |
| Class 3 (Voluntary) | £14.65 per week |
| Class 4* (Self employed on annual profits) | |
| £8,424 – £46,350 | 9% |
| Excess over £46,350 | 2% |
| *Exemption applies if state pension age was reached by 6 April 2018. | |
Key Dates and Deadlines
| Payment Dates | |
|---|---|
| Income Tax and National Insurance Contributions | |
| 31 July 2018 | 2017/18 second payment on account |
| 31 January 2019 | 2017/18 balancing payment, and 2018/19 first payment on account |
| 31 July 2019 | 2018/19 second payment on account |
| 31 January 2020 | 2018/19 balancing payment, and 2019/20 first payment on account |
| Class 1A NICs | |
| 19 July 2018 | 2017/18 payment due |
| Capital Gains Tax | |
| 31 January 2019 | 2017/18 Capital Gains Tax |
| 31 January 2020 | 2018/19 Capital Gains Tax |
| Corporation Tax | |
| 9 months and one day after the end of the accounting period (or by quarterly instalments if large company) | |
| Inheritance Tax | |
| 6 months after the end of the month of death. | |
| For chargeable lifetime transfers, due date is six months after the end of the month in which the transfer was made. | |
| Latest Filing/Issuing Deadlines – 2017/18 PAYE Returns | |
| 31 May 2018 | Issue P60s to employees. |
| 6 July 2018 | P11D and P11Db – also issue copies to employees Deadline for employment related securities returns |
| 2018 Self Assessment Tax Return (SATR) | |
| 31 October 2018 | Last filing date – SATR Paper Version |
| 30 December 2018 | SATR Online if outstanding tax (subject to cap) to be included in 2019/20 PAYE code |
| 31 January 2019 | Last filing date – SATR Online |
Pension Contributions
There is no financial limit on the amount that may be contributed to a registered pension scheme. 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 (gross).
If total pension input exceeds the annual allowance (£40,000) there may be a tax charge on the excess. Where the annual allowance limit is not fully used it may be possible to carry the unused amount forward for three years.
The annual allowance may be reduced where adjusted income exceeds £150,000. A £4,000 limit may apply where money purchase pensions are accessed.
| Maximum age for tax relief | 74 |
| Minimum age for taking benefits | 55 |
| Lifetime allowance charge | |
| – lump sum paid | 55% |
| – monies retained | 25% |
| on cumulative benefits exceeding | £1,030,000* |
*Subject to transitional protection for excess amount.
Top
Individual Savings Accounts (ISAs)
| Individual Savings Accounts (ISAs) 2018/19 | |
|---|---|
| Overall investment limit | £20,000 |
| Junior ISA limit | £4,260 |
| Help to Buy ISA monthly subscription limit (initial deposit limit £1,000) | £200 |
| Lifetime ISA annual subscription limit | £4,000 |
Notes
- Investments in ISAs are free of income tax and capital gains tax.
- Those aged 16-17 can invest in a cash ISA, in addition to a Junior ISA.
- ISAs allow you to take your money out at any time without losing tax relief and furthermore you are not required to declare income and capital gains from ISA savings.
Some Useful Rates
| Weekly Benefit | |||
|---|---|---|---|
| 2018/19 | 2017/18 | ||
| Basic Retirement Pension | |||
| Single person | £125.95 | £122.30 | |
| Couple | £201.45 | £195.60 | |
| Pension Credit Standard Minimum Guarantee | |||
| Single person | £163.00 | £159.35 | |
| Couple | £248.00 | £243.25 | |
| New State Pension | |||
| £164.35 | £159.55 | ||
| Child Benefit | |||
| First eligible child | £20.70 | £20.70 | |
| Each subsequent child | £13.70 | £13.70 | |
| Generally no additional amount for more than two children, unless born before 6 April 2017. | |||
| Statutory Sick Pay (SSP) | |||
| Average weekly earnings £116 or over (2017/18 £113) | £92.05 | £89.35 | |
| Statutory Maternity Pay (SMP) and Statutory Adoption Pay (SAP) | |||
| 90% of average weekly pay | First 6 weeks | First 6 weeks | |
| Lower of £145.18 (2017/18 £140.98) or 90% average weekly earnings | Next 33 weeks | Next 33 weeks | |
| Statutory Paternity Pay (SPP) | 2 weeks | 2 weeks | |
| Shared Parental Pay | Payable for up to the balance of the untaken SMP period. | Payable for up to the balance of the untaken SMP period. | |
| SPP and Shared Parental Pay | |||
| Lower of £145.18 (2017/18 £140.98) or 90% average weekly earnings | |||
| Jobseeker’s Allowance | |||
| Single person (25 or over) | £73.10 | £73.10 | |
| Couple (both 18 or over) | £114.85 | £114.85 | |
| National Living Wage | From 1 April 2018 | From 1 April 2017 | |
| Age 25 and over | £7.83 | £7.50 | |
| National Minimum Wage | From 1 April 2018 | From 1 April 2017 | |
| 21 – 24 | £7.38 | £7.05 | |
| 18 – 20 | £5.90 | £5.60 | |
| 16 and 17 | £4.20 | £4.05 | |
| Apprentices* | £3.70 | £3.50 | |
| *Rate applies to apprentices under 19, or those 19 and over in the first year of apprenticeship. | |||
| Universal Credit (monthly rates) | |||
| Single person (25 or over) | £317.82 | £317.82 | |
| Couple (where one or both 25 or over) | £498.89 | £498.89 | |
Stamp Taxes
The rate of stamp duty / stamp duty reserve tax on the transfer of shares and securities is generally payable at 0.5%.
Stamp Duty Land Tax (SDLT)
On the transfer of property in England and Northern Ireland, the SDLT is:
| Residential Property | |
|---|---|
| Value up to £125,000 | 0% |
| Over £125,000 – £250,000 | 2% |
| Over £250,000 – £925,000 | 5% |
| Over £925,000 – £1,500,000 | 10% |
| Over £1,500,000 | 12% |
| As announced in the Autumn Budget, from 22 November 2017 first-time buyers paying £300,000 or less for a residential property will pay no SDLT. First-time buyers paying between £300,000 and £500,000 will pay SDLT at 5% on the amount of the purchase price in excess of £300,000. In most cases these rates also apply to property lease purchases but an additional 1% is due on new leases where the net present value (NPV) of rent is more than £125,000. The purchase of additional residential properties may result in 3% being added to each of the above rates. | |
| Non-residential | |
|---|---|
| Value up to £150,000 | 0% |
| Over £150,000 – £250,000 | 2% |
| Over £250,000 | 5% |
| In most cases these rates also apply to property lease purchases but an additional 1% is due on new leases with a NPV of more than £150,000 and this rises to 2% on leases with an NPV greater than £5m. | |
Land and Buildings Transaction Tax (LBTT)
On the transfer of property in Scotland, the Land and Buildings Transaction Tax is:
| Residential | |
|---|---|
| Value up to £145,000 | 0% |
| Over £145,000 – £250,000 | 2% |
| Over £250,000 – £325,000 | 5% |
| Over £325,000 – £750,000 | 10% |
| Over £750,000 | 12% |
| Non-residential | |
|---|---|
| Value up to £150,000 | 0% |
| Over £150,000 – £350,000 | 3% |
| Over £350,000 | 4.5% |
The rates apply to the portion of the total value which falls within each band. Additional LBTT of 3% may apply to the purchase of additional residential properties.
The Scottish government is planning to introduce a new relief for first-time homebuyers for purchases up to £175,000, subject to consultation. Where a property costs more than this amount, first-time buyers will benefit from relief on the portion of the price below the threshold.
Welsh Land Transaction Tax (LTT)
From 1 April 2018, Wales will roll out its own stamp duty equivalent, the Land Transaction Tax (LTT), which preserves the essential structure of SDLT but with some key differences, including a higher starting threshold, together with higher rates of duty for some residential properties with a greater value. The existing first-time buyer exemption will also be removed.
The proposed new LTT rates are:
| Residential (£) | Rate (%) |
|---|---|
| Up to 180,000 | 0 |
| 180,000 – 250,000 | 3.5 |
| 250,000 – 400,000 | 5 |
| 400,000 – 750,000 | 7.5 |
| 750,000 – 1,500,000 | 10 |
| Over 1,500,000 | 12 |
Additional LTT of 3% may apply to the purchase of additional residential properties.
| Non-residential (£) | Rate (%) |
|---|---|
| Up to 150,000 | 0 |
| 150,000 – 250,000 | 1 |
| 250,000 – 1,000,000 | 5 |
| Over 1,000,000 | 6 |
