Tax Rates and Allowances

 

£ per year (unless stated)

2017-18
(£)
2016-17
(£)

2015-16 (£)

2014-15 (£)

 

       

Income tax

       

Personal allowance (age under 65) *

11,500 11,000

10,600

10,000

Personal allowance (age 65-74)

   

10,600

10,500

Personal allowance (age 75 and over)

   

10,660

10,660

Rent a room relief

**

7,500 7,500    
Trading Income** 1,000      
Property Income** 1,000      

Married couple's allowance**

   

8,355

8,165

Married couple's allowance** – minimum amount

   

3,220

3,140

Income limit for age-related allowances

   

27,700

27,000

Blind person’s allowance

2,320 2,290

2,290

2,230

Marriage allowance****

   

1,060

 

   

 

 

Starting rate band of 0% on savings income up to

   

5,000

Starting rate band of 10% on savings income up to

   

2,880

Basic rate of 20% on income; 10% on dividend income

  32,000

0 – 31,785

0 – 31,865

Higher rate of 40% on income; 32.5% on dividend income

  32,000 – 150,000

31,786 – 150,000

31,866 – 150,000

Additional rate of 45% on income over; 37.5% on dividend income

  Over 150,000

Over 150,000

Over 150,000

*PA will be withdrawn at £1 for every
£2 by which ‘adjusted income’ exceeds £100,000. There will therefore be no allowance given if adjusted income is £123,000 or more (2016/17: £122,000).

10% of the PA (2017/18: £1,150; 2016/17: £1,100) can be transferred to a spouse or civil partner who is no more than a basic rate taxpayer.

*If gross income exceeds it. the limit may be deducted instead of actual expenses.

 

Tax rates

 

Rates differ for General/Savings/Dividend income

 

 

2017/18 2016/17
 

G S D G S D
Basic rate 20% 20% 7.5% 20% 20% 7.5%
Higher rate 40% 40% 32.5% 40% 40% 32.5%
Additional rate 45% 45% 38.1% 45% 45% 38.1%

 

General Income (salary, pensions, business profits, rent) usually uses personal allowance, basic rate and higher rate bands before savings income (interest). to the extent that savings income falls in the first £5,000 of the basic rate bank, it is taxed at nil rather than 20%.

The PSA taxes interest at nil, where it would otherwise be taxable at 20% of 40%. Dividends are normally taxed as the ‘top slice’ of income. The DNRB taxes the first £5,000 of dividend income at nil, rather than the rate that would otherwise apply.

 

High Income Child Benefit Charge (HICBC)

 

1% of child benefit for each £100 of adjusted net income between £50,000 and £60,000.

 

Remittance basis charge

 

For non-UK domiciled individuals who have been UK resident in at least

 

 

2017/18 2016/17 2015/16
7 of the preceding 9 tax years £30,000 £30,000 £30,000
12 of the preceding 14 tax years £60,000 £60,000 £60,000
17 of the preceding 20 tax years N/A £90,000 £90,000

 

Capital gains tax 

Annual exempt ammount

 

 

 

Individuals, personal representatives and trustees for disabled people

11,100

11,000

10,900

Other trustees

5,550

5,500

5,450

Rates

 

 

 

Individuals – within the remaining basic rate band

18%

18%

18%

Individuals – above the basic rate band

28%

28%

28%

Trustees or personal representatives of someone who has died

28%

28%

28%

For gains qualifying for Entrepreneurs' Relief

10%

10%

10%

 

 

 

 

Inheritance Tax

Rate

40%

40%

40%

Lower Rate ***

36%

36%

36%

Nil rate band

325,000

325,000

325,000

 

* Personal allowance reduced by 50% of income over £100,000.

** Married couple's allowance is given as a 10% tax credit. Either person must be born before 6th April 1935.

*** For deaths on or after 6th April 2012, a lower rate of Inheritance tax of 36% can apply where 10% or more of the deceased person's net estate is left to charity.

****You can claim Marriage Allowance if all the following apply:

  1. you’re married or in a civil partnership
  2. your annual income is £10,600 or less, plus up to £5,000 of tax-free savings interest
  3. your partner’s annual income is between £10,601 and £42,385
  4. you were born on or after 6 April 1935

 

Corporation Tax

 

Year To

31.03.2017

Corporation Tax Rate 20

 

Research and development Relief

From 01.04.2016

SME enhanced expenditure deduction scheme* 130%
Large compnay enhanced expenditure deduction scheme* N/A
Large company R & D Expenditure Credit (RDEC) scheme* 11%

* Additional deduction for qualifying R & D.

** Taxable expenditure credit for qualifying R & D.

SMEs that make losses can surrender the deduction to HMRC in a payment of 14.5% of the loss.

From 1 April, 2016, RDEC is the only scheme available for large.

 

National Insurance

 

£ per week (unless stated)

2015-16

2014-15

2013-14

Lower earnings limit, primary Class 1

£112

£111

£109

Upper earnings limit, primary Class 1

£815

£805

£797

Upper accruals point

£770

£770

£770

Primary threshold

£155

£153

£149

Secondary threshold

£156

£153

£148

Employees’ primary Class 1 rate between primary threshold and upper earnings limit

12%

12%

12%

Employees’ primary Class 1 rate above upper earnings limit

2%

2%

2%

Employees’ contracted-out rebate (for contracted-out salary-related schemes only)

1.4%

1.4%

1.4%

Married women’s reduced rate between primary threshold and upper earnings limit

5.85%

5.85%

5.85%

Married women’s rate above upper earnings limit

2%

2%

2%

Employers’ secondary Class 1 rate above secondary threshold

13.8%

13.8%

13.8%

Employers’ contracted-out rebate, salary-related schemes

3.4%

3.4%

3.4%

Class 2 rate 

£2.80

£2.75

£2.70

Class 2 Small Profits Threshold

£5,965

Class 2 Small earnings exception (per year)

£5,885

£5,725

Special Class 2 rate for share fishermen

£3.45

£3.40

£3.35

Special Class 2 rate for volunteer development workers

£5.60

£5.55

£5.45

Class 3 rate (per week)

£14.10

£13.90

£13.55

Class 4 lower profits limit (per year)

£8,060

£7,956

£7,755

Class 4 upper profits limit (per year)

£42,385

£41,865

£41,450

Class 4 rate between lower profits limit and upper profits limit

9%

9%

9%

Class 4 rate above upper profits limit

2%

2%

2%

 

Tax Credits and Benefits

 

£ per year (unless stated)

2015-16

2014-15

2013-14

 

Working Tax Credit

Basic element

£1,960

£1,940

£1,920

Couple and lone parent element

£2,010

£1,990

£1,970

30 hour element

£810

£800

£790

Disabled worker element

£2,970

£2,935

£2,855

Severe disability element

£1,275

£1,255

£1,220

 

Childcare Element of the Working Tax Credit

Maximum eligible cost for one child

£175 per week

£175 per week

£175 per week

Maximum eligible cost for two or more children

£300 per week

£300 per week

£300 per week

Percentage of eligible costs covered

70%

70%

70%

Child Tax Credit

Family element

£545

£545

£545

Child element

£2,780

£2,750

£2,720

Disabled child element

£3,140

£3,100

£3,015

Severely disabled child element

£1,275

£1,255

£1,220

 

Income Thresholds and Withdrawal Rates

Income threshold

£6,420

£6,420

£6,420

Withdrawal rate

41%

41%

41%

Threshold for those entitled to Child Tax Credit only

£16,105

£16,010

£15,910

Income rise disregard

£5,000

£5,000

£5,000

Income fall disregard

£2,500

£2,500

£2,500

 

 

 

 

Child Benefit and Guardian’s Allowance Rates

£ per week

 

 

 

First child

20.70

20.50

20.30

Second and subsequent children (per child) 

13.70

13.55

13.40

Guardian’s allowance

16.55

16.35

15.90

 

TAX RATES 2015-16

 

Income Tax

 

Main allowances 2015/16 2014/15
Personal Allowance (PA) £10,600 £10,000
Personal Allowance (born 6.4.38-5.4.48) 10,600 10,500
Personal Allowance (born before 6.4.38) 10,660 10,660
Transferable Tax Allowance** 1,060 Nil
Blind Person’s Allowance 2,290 2,230

Allowed only at 10%

 

 

 

 

 

Married Couple’s Allowance (MCA)  

 

(only available if born before 6.4.35) 8,355 8,165
Age-related allowance income limit (AAIL) 27,700 27,000

PA is withdrawn at £1 for every £2 by which net income exceeds £100,000, such that PA becomes nil at income of £121,200 (2014/15: £120,000).

*These allowances are reduced by £1 for every £2 by which income exceeds AAIL. Personal allowance is reduced before MCA, until equal to normal PA. MCA is reduced to minimum £3,220 (2014/15: £3,140).

**Married couples/civil partners born after 5 April 1935 can transfer this amount of the PA between them as long as the recipient is not taxed at more than 20%.

 

Rate bands 2015/16 2014/15
Basic rate band (BRB) 31,785 31,865
Higher rate band (HRB) 31,786 – 150,000 31,866 – 150,000
Additional rate over 150,000 over 150,000

BRB and HRB are extended by personal pension contributions (up to permitted limit) and Gift Aid donations.

 

Tax Rates

 

Rates differ for General/Savings/Dividend income

 

2015/16 unchanged from 2014/15
 

G S D
Basic rate 31,785  

31,865
Higher rate 31,786 – 150,000  

31,866 – 150,000
Additional rate over 150,000  

over 150,000

If taxable general income is less than £5,000 (2014/15: £2,880), savings income is taxed at a ‘starting rate’ of nil (2014/15: 10%) until total taxable income exceeds that limit. This ‘starting rate band’ is part of the BRB.

 

High Income Child Benefit Charge (HICBC)

 

1% of child benefit for each £100 of adjusted net income between £50,000 and £60,000.

 

Remittance basis charge

 

For non-UK domiciled individuals who have been UK resident in at least

Rate bands 2015/16 2014/15
7 of the preceding 9 tax years £30,000 £30,000
12 of the preceding 14 tax years 60,000 50,000
17 of the preceding 20 tax years 90,000 N/A

 

Pensions

 

Registered Pensions 2017/18 2016/17 2015/16
Lifetime allowance (LA) £ 1.00m £ 1.00m £1.25m
Annual allowance (AA) 40,000 40,000 40,000
LA charge if excess drawn as Cash   cash 55% 55%/income
AA charge on excess inputs    

20%-45%

Annual relievable pension inputs are the higher of earnings (capped at AA) or £3,600.
*The AA is usually reduced by £1 for every £2 by which relevant income exceeds £150,000, down to a minimum AA of £10,000. The AA can be reduced to £4,000, where certain pension drawings have been made.

State pension 2016/17 2015/16 2014/15
Single person £ 119.30 £115.95 £113.10
Married couple £ 190.80 185.45 180.90
New state pension S 155.65 N/A N/A

applies to those reaching state retirement age after 5 April 2016.

Annual investment limits

2017/18 2016/17 2015/16
Individual Savings Account
– Overall limit
£ 20,000 £ 15,240 £15,240
Lifetime ISA 4,000 N/A  
Junior ISA 4,128 4,080 4,080
EIS – 30% relief 1000,000 1000,000 1,000,000
EIS eligible for CGT deferral relief Unlimited Unlimited Unlimited
Seed EIS (SEIS) – 50% relief 100,000 100,000 100,000
SEIS – 50% exemption for reinvested gains 100,000 100,000 100,000
Venture Capital Trust (VCT) – 30% relief 200,000 200,000 200,000

 

National Insurance Contributions

 

  2017/18 2016/17

Class 1 (Employees)

Employee Employer
Main NIC rate 12% 13.8%
No NIC on first £157pw £157pw
Main rate* charged up to £866pw no limit
2% rate on earnings above £866pw N/A
Employment allowance per business N/A £3,000

*Nil rate of employer NIC for employees under the age of 21 and apprentices under 25 up to £866pw. Employer contributions (at 13.8%) are also due on most taxable benefits (Class 1A) and on tax paid on an employee’s behalf under a PAYE settlement agreement (Class 1B).

**Some business do not qualify, including certain sole director companies.

 

Class 2 (Self employed)

 

Flat rate per week £2.85

£2.80
Small profits threshold £6,025

£5,965

 

Class 3 (Voluntary)

 

Class 3: Flat rate per week £14.25

£14.10

Class 3A: Contributions vary with age

 

 

 

Class 4 (Self Employed)

 

On profits £8,164 – £45,000 9.0%

9.0%

On profits over £45,000

2.0%

2.0%

Vehicle Benefits

 

Cars

 

Taxable benefit: Chargeable value multiplied by chargeable %. Chargeable value: Initial list price of car (including most accessories), reduced by any capital contribution (maximum £5,000) by employee when the car is first made available.

 

Chargeable percentage:

 

CO2 emissions
g/km
Petrol Diesel

0-50g/km

9% 12%
51-75g/km 13% 16%
76-94g/km 17% 20%
Above 94g/km Add 1% for every 5g/km  

Above 189g/km (petrol)/ 174g/km (diesel) 37% maximum  

 

Vans

 

Chargeable value of £3,230 (2016/17 £3,170)  if private use is more than home-to-work.

 

Fuel

 

Employer provides fuel for private motoring in an employer-owned:
Car: CO2-based percentage from above table multiplied by £22,600 (2016/17 £22,200).

Van: £610 (2016/17 £598)  Employee contributions do not reduce taxable figure unless all private fuel is paid for by the employee (in which case there is no benefit charge).

 

Tax-Free Mileage Allowances

 

Employee’s own transport  

per business mile

Cars first 10,000 miles

 

45p
Cars over 10,000 miles  

25p
Business passengers  

5p
Motorcycles  

24p
Bicycles  

20p

 

Capital Gains Tax

 

Annual exemption 2017/18 2016/17 2015/16

Individuals, estates

£11,300 £11,100 £11,100
Most trusts 5,650 5,550 5,550

 

Tax Rate

 

Individual (to basic rate limit)

10% 10% 18%
Individual (above basic rate limit) 20% 20% 28%
Entrepreneurs’ Relief (ER)* 10% 10% 10%
Trusts, estates 20% 20% 28%

*Individuals are taxed at 18% 28% on gains on residential property and receipt of carried interest. Trust are taxed at 28% in these circumstances.

*ER is available for lifetime gains of up to £10m. Qualifying disposals include a trading business and shares in a trading company (from a minimum 5% holding) by an officer/employee. Various conditions apply.

 

Corporation Tax

 

Year to 31.3.2018 31.3.2017

Corporatin tax rate

19% 20%

 

Research and development relief    

SME enhanced expenditure deduction scheme*

130% 130%
Large company R&D Expenditure Credit (RDEC) scheme** 11% 11%

*Additional deduction for qualifying R&D
**Taxable expenditure credit for qualifying R&D

SMEs that make losses can surrender the deduction to HMRC in exchange for a payment of 14.5% of the loss.

 

Main Capital Allowances

 

Plant and machinery  

Limit

100% Annual Investment Allowance (AIA)

 

£200,000

 

Other Rates

 

– energy- and water-efficient equipment

 

100%
– writing down allowance: general pool (reducing balance)  

18%
– writing down allowance: special rate pool (reducing balance)  

8%

The special rate pool includes long life assets, integral plant in buildings, thermal insulation.

 

Motor Cars (Expenditure post 31.3.15)

 

CO2 emissions (g/km)  

Allowance

75* or less (new cars only)in first year

 

100%
Up to 130 (in general pool)  

18%
Above 130 (in special rate pool)  

8%

 

Property Taxes

 

Annual Tax on Enveloped Dwellings (ATED)

 

ATTED applies to 'high value' residential properties own via a corporate structure, unless the property is used for a qualifying purpose. It applies to property valued at more than £500,000.

 

   

Annual charge to
Property value 31-3-2018 31-3-2017 31.3.2016 31.3.2015
£0.5m – £1m £3,500 £3,500 N/A N/A

£1m – £2m

£7,050 £7,000 £7,000 N/A
£2m – £5m 23,550 23,350 23,350 £15,400
£5m – £10m 54,950 54,450 35,900
£10m – £20m 110,100 109,050 109,050 71,850
£20m + 220,350 218,200 218,200 143,750

 

Stamp Duty Land Tax (SDLT)

 

Land & Building Transaction Tax (LBTT)

From 1 April 2015, SDLT was replaced in Scotland by LBTT. Like SDLT, it is payable by the purchaser.

Residential property (1st property only):

SDLT * Rate on band LBTT Rate on band
£,000's  

£,000's  

Up to £125,000

Nil

Up to £145,000

Nil
£125,001 – £250,000 2% 145 – 250 2%
£250,001 – £925,000 5% 250 – 325 5%
£925,001 – £1.5m 10% 325 – 750 10%
£1.5m + 12% Over 750 12%

A supplement of 3% of the total purchase price applies for both SDLT and LBTT where a second home is purchased from more than £40,000 from 1 April 2016.

*A rate of 15% applies to the total purchase price where the property is valued above £500,000 and purchased by a ‘non-natural person’ (e.g. a company).

Non-Residential or mixed use property:

SDLT Rate on band LBTT Rate on band
£,000's  

£,000's  

Up to £150,000

Nil up to 150 Nil
£150,001 – £250,000 2% 150 – 350 3%
Over £250,000 5% Over 250 4.5%

 

Land and Buildings Transaction Tax (LBTT)

 

From 1 April 2015, SDLT is replaced in Scotland by LBTT. Like SDLT, it is payable by the purchaser.

 

Value Added Tax

 

Standard rate (1/6 of VAT-inclusive price)

 

20%
Registration level from 1.4.2017  

£85,000 per annum
Deregistration level from 1.4.2017  

83,000 per annum

 

Flat Rate Scheme (FRS)

 

Annual taxable turnover to enter scheme

 

Up to £150,000
Must leave scheme if annual taxable turnover  

exceeds £230,000

 

Inheritance Tax

 

 

2017/18 2016/17 2015/16

Nil rate band*

£325,000 £325,000 £325,000
NRB Residential enhancement (RNBB)* 100,000    
Rate of tax above nil rate band** 40% 40% 40%
Lifetime transfers to most trusts 20% 20% 20%

RNRB is available for transfers of a main residence to directo descendents. It tapers away at the rate of £1 for every £2 of estate value above £2m.
*Up to 100% of the proportion of a deceased spouse’s/civil partner’s unused NRB and RNRB band may be claimed to increment the current NRB and RNRB when the survivor dies.
**Rate reduced to 36% if at least 10% of the relevant estate is left to charity.
Unlimited exemption for transfers between spouses/civil partners, except if UK domiciled transferor and foreign domiciled transferee, where maximum exemption £325,000.

100% Business Property Relief (BPR) for all shareholdings in qualifying unquoted trading companies, qualifying unincorporated trading companies and certain farmland/buildings.

 

Reduced Tax Charge on Gifts within 7 Years Before Death

 

Years before death 0-3 3-4 4-5 5-6 6-7 %
% of full death tax charge payable 100 80 60 40 20

Annual exemptions for lifetime gifts include £3,000 per donor and £250 per recipient.

 

Key Dates and Deadlines

 

Self Assessment payment dates  

2017/18 2016/17 2015/16

1st payment on account

31 January 2018 2017 2016
2nd payment on account 31 July 2018 2017 2016
Balancing payment 31 January 2019 2018 2017
CGT 31 January 2019 2018 2017

*Non-residents with gains on UKM residential property must pay CGT within 30 days of disposal unless already filling a self assessment tax return.

Other Payment Dates

 

Class 1A NIC

19 July 2018 2017 2016
Class 1B NIC 19 October 2018 2017 2016

Corporation tax is due 9 months and 1 day from the end of the accounting period, unless a ‘large’ company paying by quarterly instalments.

 

2016/17 Filing Deadlines

 

Issue P60s to employees

 

31 May 2017
P11D, P11D(b)  

 6 July 2017
Self assessment tax return (SATR) paper version  

31 October 2017
 

 

 

Online SATR if outstanding tax

 

 

to be included in 2018/19 PAYE code  

30 December 2017
Online SATR  

31 January 2018

You are advised to consult us before acting on any information contained herein.

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