Income Tax Rates

2017/18 2016/17
Band (£) Rate (%)   Band (£) Rate (%)
0 - 5,000 0*   0 - 5,000 0*
0 - 33,500+ 20**   0 - 32,000 20**
33,501+ - 150,000 40***   32,001 - 150,000 40***
Over 150,000 45****   Over 150,000 45****

+ For Scottish taxpayers only the limit is £31,500.

* Only applicable to savings income. This rate is not available if taxable non-savings income exceeds £5,000. £1,000 of savings income for basic rate taxpayers (£500 for higher rate) may be tax free.

** Except dividends 7.5%.

*** Except dividends 32.5%.

**** Except dividends 38.1.

Other income taxed first, then savings income and finally dividends. The first £5,000 of dividends are tax free.

Income Tax Reliefs

 2017/18 £2016/17 £ 
Personal allowance 11,500** 11,000**  
(Reduce personal allowance by £1 for every £2 of adjusted net income over £100,000.)
**£1,150 (£1,100) may be transferrable between certain spouses where neither pay tax above the basic rate.
Married couple's allowance (relief at 10%)*
(Either partner 75 or over and born before 6 April 1935.)
8,445 8,355
  - min. amount 3,260 3,220
* Age allowance income limit 28,000 27,700
(Reduce age allowance by £1 for every £2 of adjusted net income over £28,000 (£27,700.)
Blind person's allowance

Pension Premiums

2017/18

  • Tax relief available for personal contributions: higher of £3,600 (gross) or 100% of relevant earnings (max. £40,000).
  • Any contributions in excess of £40,000, whether personal or by the employer, may be subject to income tax on the individual.
  • The £40,000 limit may be reduced where 'adjusted net income' exceeds £150,000.
  • The limit may be reduced to £4,000 once money purchase pensions are accessed.
  • Where the £40,000 limit is not fully used it may be possible to carry the unused amount forward for three years.
  • Employers will obtain tax relief on employer contributions if they are paid and made 'wholly and exclusively'.

Car, Van and Fuel Benefits

Company cars 2017/18
CO2 emissions (gm/km)
(round down to nearest 5gm/km)
% of car's list price taxed
0 to 50* 9
51 to 75* 13
76 to 94* 17
95 18
100 19
105 20
110 21
115 22
120 23
125 24
130 25
135 26
140 27
145 28
150 29
155 30
160 31
165 32
170 33
175 34
180 35
185 36
190 and above 37

* Rounding down to the nearest 5gm/km does not apply.

Company cars

  • For diesel cars add a 3% supplement but maximum still 37%.
  • For cars registered before 1 January 1998 the charge is based on engine size.
  • The list price includes accessories and is not subject to an upper limit.
  • The list price is reduced for capital contributions made by the employee up to £5,000.
  • Special rules may apply to cars provided for disabled employees.

Car fuel benefit 2017/18

£22,600 x 'appropriate percentage'*

* Percentage used to calculate the taxable benefit of the car for which the fuel is provided.

  • The charge does not apply to certain environmentally friendly cars.
  • The charge is proportionately reduced if provision of private fuel ceases part way through the year. The fuel benefit is reduced to nil only if the employee pays for all private fuel.

Van benefit per vehicle 2017/18

  • Van benefit £3,230
  • Fuel benefit £610

The charges do not apply to vans if a 'restricted private use condition' is met throughout the year.

A reduced charge may be due if the van cannot in any circumstances emit CO2 by being driven.

Mileage Allowance Payments

Cars and vans2017/18 and 2016/17 Rate per mile
Up to 10,000 miles
45p
Over 10,000 miles
25p
Bicycles
20p
Motorcycles
24p

These rates represent the maximum tax free mileage allowances for employees using their own vehicles for business. Any excess is taxable. If the employee receives less than the statutory rate, tax relief can be claimed on the difference.

Individual Savings Accounts

 2017/182016/17
 
£
£
Overall investment limit
20,000
15,240
Overall investment limit
4,128
4,080

Corporation Tax

Year to 31.3.18 Year to 31.3.17
Profits band £ Rate %   Profits band £ Rate %
All profits 19%   All profits 20%

Different rates apply for ring-fenced (broadly oil industry) profit.

Capital Allowances

Plant and machinery - Annual Investment Allowance (AIA)

The AIA gives a 100% write-off on most types of plant and machinery costs, including integral features and long life assets but not cars, of up to £200,000 p.a.

Any costs over the AIA fall into the normal capital allowance pools below. The AIA may need to be shared between certain businesses under common ownership.

Other plant and machinery allowances

The annual rate of allowance is 18%. An 8% rate applies to expenditure incurred on integral features and on long life assets.

A 100% first year allowance may be available on certain energy efficient plant and cars.

Cars

For expenditure incurred on cars, costs are generally allocated to one of the two plant and machinery pools. Cars with CO2 emissions not exceeding 130gm/km receive an 18% allowance p.a. Cars with CO2 emissions over 130gm/km receive an 8% allowance p.a. The emissions figure is reduced to 110gm/km for expenditure incurred on or after 1 April 2018.

Value Added Tax

Standard rate
20%
Reduced rate
5%
Annual Registration Limit - from 1.4.17 (1.4.16 - 31.3.17 £83,000)
£85,000
Annual Deregistration Limit - from 1.4.17 (1.4.16 - 31.3.17 £81,000)
£83,000

Capital Gains Tax

 2017/18**2016/17**
Individuals
£
£
Exemption
11,300
11,100
Standard rate
10%
10%
Higher rate*
20%
20%
Trusts
Exemption
5,650
5,550
Rate
20%
20%

*For higher and additional rate taxpayers
** Higher rates (18/28%) may apply to the disposal of certain residential property and carried interest.

Entrepreneurs' Relief

The first £10m of qualifying gains are charged at 10%. Gains in excess of the limit are charged at the rates detailed above.

Notes
  1. Transfers between spouses and civil partners living together are exempt.
  2. Entrepreneurs' relief of 100% is available in respect of gains made on the disposal of all or part of a business, or gains made on disposals of assets following the cessation of a business or gains by certain individuals who were involved in running the business.
  3. Non-UK residents are now subject to capital gains tax on the sale of UK residential property.
Other exemptions:
  • SEED enterprise investment scheme (subject to conditions): 100%/50%
  • Venture capital trust: 100%
  • Social investment tax relief: 30%
  • Principal private residence (subject to conditions): 100%

Inheritance Tax

Death rate %Lifetime rate %Chargeable transfers 2017/18 and 2016/17 £'000
Nil
Nil
0 - 325 (nil rate band)
40
20
Over 325

For 2017/18, a further nil rate band of £100,000 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.

Reliefs
Annual exemption £3,000 Marriage - parent £5,000
Small gifts £250   - grandparent £2,500
      - bride/groom £2,500
      - other £1,000
Reduced charge on gifts within seven years of death
Years before death 0-3 3-4 4-5 5-6 6-7
% of death charge 100 80 60 40 20

Stamp Duty & Stamp Duty Land Tax

Land and buildings in England, Wales and N. Ireland

The rates apply to the portion of the total value which falls within each band.

Residential property

Consideration (£)

Rate* %

0 - 125,000
0
125,001 - 250,000
2
250,001 - 925,000
5
925,001 - 1,500,000
10
Over 1,500,000
12

* Rates may be increased by 3% where further residential properties costing £40,000 or over are acquired.

SDLT is charged at 15% on interests in residential dwellings costing more than £500,000 purchased by certain non-natural persons.

Non- residential property

Consideration (£)

Rate %

0 - 150,000
0
150,001 - 250,000
2
Over 250,000
5

Shares and securities

Rate - 0.5%

National Insurance

2017/18 Class 1 (employed) rates
Employee
Employer**
Earnings per week % Earnings per week** %
Up to £157 Nil* Up to £157 Nil
£157.01 - £866 12 Over £157 13.8**
Over £866 2    

* Entitlement to contribution-based benefits retained for earnings between £113 and £157 per week.
** The rate is 0% for employees under 21 and apprentices under 25 on earnings up to £866 per week.

Class 1A (employers) 13.8% on employee taxable benefits
Class 1B (employers) 13.8% on PAYE Settlement Agreements
Class 2 (self-employed) flat rate per week £2.85
small profits threshold £6,025 p.a.
Class 3 (voluntary) flat rate per week £14.25
Class 4 (self-employed) 9% on profits between £8,164 and £45,000 plus 2% on profits over £45,000

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