Tax Rates

Tax Rates 2018-04-06T13:51:04+00:00

Click here to see our Payroll Data Card

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 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 £1,190 £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 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.

Financial Year to 31 March 2019 31 March 2018
Corporation Tax rate 19% 19%

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%

 

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

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

  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 previous year.
  3. Gifts of up to but not exceeding £250 p.a. to any number of persons.
  4. 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.
  5. Gifts made out of income that form part of normal expenditure and do not reduce the standard of living.
  6. Gifts to charities, whether made during lifetime or on death.

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

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.

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.

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

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.

Gift Aid

  1. Individuals are able to claim higher rate relief on cash gifts and payments to charities under gift aid. Basic rate tax is treated as having been deducted, so you must pay enough tax for the year to cover the tax witheld from your Gift Aid payment.
  2. Special tax reliefs apply to gifts to charities of certain types of shares and securities, or land and buildings.
  3. Individuals have the opportunity to make a claim for charitable donations made in one tax year to be treated as if they had been made in the previous tax year. For example, a request could be made for Gift Aid payments made between 6 April 2017 and the date that the 2017 return is filed to be treated as if they were made in the year to 5 April 2017. This would mean that a payment could rank for higher rate tax relief for 2016/17, even if the donor is liable at basic rate only in 2017/18. The request would normally be made by completing the relevant box in the 2017 tax return, and the opportunity to carry back donations is lost once that return has been filed (provided this is no later than 31 October 2017 or 31 January 2018, as appropriate). It is not possible to amend the 2017 tax return in order to carry back a donation.

Give As You Earn (Payroll Giving)

  1. Employees may authorise participating employers to deduct donations from their gross salary for forwarding to their nominated charities.
  2. Employees receive tax relief in full on their donations.

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

  1. Investments in ISAs are free of income tax and capital gains tax.
  2. Those aged 16-17 can invest in a cash ISA, in addition to a Junior ISA.
  3. 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.

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

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.

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.

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