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Tax Rates

Income Tax rates and allowances

Income Tax allowances table
Income Tax allowances 2017-18 2018-19 2019-20
Personal Allowance £11,500 £11,850 £12,500
Income limit for Personal Allowance £100,000 £100,000 £100,000
Married Couple's Allowance (born before 6th April 1935 and aged 75 and over) (2) (3) £8,445 £8,695 £8,915
Income limit for the allowances for those born before 6 April 1948 £28,000 £28,900 £29,600
Minimum amount of Married Couple's Allowance £3,260 £3,360 £3,450
Marriage Allowance (4) £1,150 £1,190 £1,250
Blind Person's Allowance £2,320 £2,390 £2,450
  1. The Personal Allowance reduces where the income is above £100,000 - by £1 for every £2 of income above the £100,000 limit. This reduction applies irrespective of age.
  2. This allowance reduce where the income is above the income limit by £1 for every £2 of income above the limit.
  3. Tax relief for the Married Couple's Allowance is given at the rate of 10 per cent.
  4. Marriage allowance is available to married couples and civil partners not in receipt of married couple's allowance. A spouse or civil partner who is not liable to income tax or not liable at the higher or additional rate, can transfer this amount of their personal allowance to their spouse. The recipient must not be liable to income tax at the higher or additional rate.

Other Allowances

Other Allowances 2017-18 2018-19 2019-20
Personal Savings Allowance - Basic Rate (1) £1,000 £1,000 £1,000
Personal Savings Allowance - Higher Rate (1) £500 £500 £500
Dividend Allowance (2) £5,000 £2,000 £2,000
  1. From 6 April 2016, UK tax is no longer deducted at source from bank and other interest. Instead, the first £1,000 of interest for a basic rate taxpayer is tax free. For higher rate taxpayers, the tax free allowance is reduced to £500
  2. From 6 April 2016 the dividend tax credit is replaced by a new tax-free Dividend allowance. Any dividend income above this allowance is taxable at 7.5 percent/32.5 percent or 38.1 percent, depending on rate band

Income Tax rates and taxable bands

Income Tax rates and taxable bands
Rate 2017-18 2018-19 2019-20
Starting rate for savings: 10%/0% (1) £0-£5,000 £0-£5,000 £0-£5,000
Basic rate: 20% (2) £0-£33,500 £0-£34,500 £0-£37,500
Higher rate: 40% (2) £33,501-£150,000 £34,501-£150,000 £37,501-£150,000
Additional rate: 45% (2) Over £150,000 Over £150,000 Over £150,000

(1) The 0 per cent starting rate applies to savings income only. If, after deducting your Personal Allowance from your total income liable to Income Tax, your non-savings income is above this limit then the 0 per cent starting rate for savings will not apply. Non-savings income includes income from employment, profits from self-employment, pensions, income from property and taxable benefits.

(2) The rates available for dividends are the 7.5 per cent ordinary rate (within Basic rate band), the 32.5 per cent dividend upper rate (within Higher rate) and the dividend additional rate of 38.1 per cent.

Scottish Taxpayers

Income Tax rates and taxable bands

Rate 2017-18 2018-19
Starter Rate: 19% (1) - £0-£2,000
Basic rate: 20% (1) £0-£31,500 £2,001-£12,150
Intermediate rate: 21% (1) - £12,151-£31,580
Higher rate: 41% (1) (2) £31,501-£150,000 £31,581-£150,000
Top rate: 46% (2) Over £150,000 Over £150,000

(1) The Scottish rates apply to non-savings income only

(2) Higher rate was 40% in 2017/18

(3) Top rate was 45% in 2017/18

National Insurance Contributions

National Insurance contributions - rates and allowances
£ per week 2017-18 2018-19 2019-20
Lower earnings limit, primary Class 1 £113 £116 £118
Upper earnings limit, primary Class 1 £866 £892 £962
Primary threshold £157 £162 £166
Secondary threshold £157 £162 £166
Employees' primary Class 1 rate between primary threshold and upper earnings limit 0.12 0.12 0.12
Employees' primary Class 1 rate above upper earnings limit 0.02 0.02 0.02
Class 1A rate on employer provided benefits (1) 0.138 0.138 0.138
Married women's reduced rate between primary threshold and upper earnings limit 0.0585 0.0585 0.0585
Married women's rate above upper earnings limit 0.02 0.02 0.02
Employers' secondary Class 1 rate above secondary threshold 0.138 0.138 0.138
Class 2 rate £2.85 £2.95 £3.00
Class 2 small profits threshold £6,025 £6,205 £6,365
Special Class 2 rate for share fishermen £3.50 £3.60 £3.65
Special Class 2 rate for volunteer development workers £5.65 £5.80 £5.90
Class 3 rate £14.25 £14.65 £15.00
Class 4 lower profits limit £8,164 £8,424 £8,632
Class 4 upper profits limit £45,000 £46,350 £50,000
Class 4 rate between lower profits limit and upper profits limit 0.09 0.09 0.09
Class 4 rate above upper profits limit 0.02 0.02 0.02
Additional primary Class 1 percentage rate on deferred employments 0.02 0.02 0.02
Additional Class 4 percentage rate where deferment has been granted 0.02 0.02 0.02
  1. Class 1A NICs are payable in July and are calculated on the value of taxable benefits provided in the previous tax year, using the secondary Class 1 percentage rate appropriate to that tax year.

Corporation Tax rates

Rates for financial years starting on 1 April
Rate 2018 2019 2020
Main rate of Corporation Tax 19% 19% 17%
Special rate for unit trusts and open-ended investment companies 19% 19% 17%

Corporation Tax on chargeable gains

Indexation Allowance allows for the effects of inflation when calculating the chargeable gains of companies or organisations.Indexation allowance is frozen at the December 2017 rate.

Trading Losses

Trading losses that you have not used in any other way can be offset against profits in future accounting periods, so long as the trade continues.

Trading losses are carried forward and set against profits of the same trade of the next accounting period for losses made in accounting periods ending before 1 April 2017.

For accounting periods from 1 April 2017, the way trading losses are set off will depend on when they arise.

Losses that arise up to 31 March 2017

These losses are carried forward and set against profits of the same trade of the next accounting period. If you do not want the losses set off, you can make a claim for these to be carried forward and set against trading profits of the following period instead.

Losses that arise from 1 April 2017

These losses are carried forward. In most cases they can be set against total profits of the company (rather than only being available to the same trade), or in certain circumstances, against total profits of a group company.

Accounting periods that begin before and end after 1 April 2017

The profits and losses of the periods are apportioned. Profits and losses arising:

• before 31 March 2017 are treated as arising in a separate accounting period ending on that date

• from 1 April 2017 are treated as arising in a separate accounting period beginning on that date

Profits that arise from 1 April 2017

There are also restrictions on the total amount that can be relieved for profits of accounting periods from 1 April 2017.

These apply to carried-forward trading losses so that the total:

• amount that can be relieved using carried-forward trading losses that arose before 1 April 2017 is restricted to, broadly, the amount of an allowance up to £5 million, plus 50% of remaining trading profits after deduction of the allowance

• overall amount that can be relieved using most types of carried-forward losses - including carried-forward trading losses incurred either before or after 1 April 2017 - is restricted to, broadly, the amount of an allowance up to £5 million, plus 50% of remaining total profits after deduction of the allowance

Capital Gains Tax rates and annual tax-free allowances

Each tax year nearly everyone who is liable to Capital Gains Tax gets an annual tax-free allowance - known as the 'Annual Exempt Amount'. You only pay Capital Gains Tax if your overall gains for the tax year (after deducting any losses and applying any reliefs) are above this amount.

Tax-free allowances for Capital Gains Tax

The annual tax-free allowance (known as the Annual Exempt Amount) allows you to make a certain amount of gains each year before you have to pay tax.

Nearly everyone who is liable to Capital Gains Tax gets this tax-free allowance.

There's one Annual Exempt Amount for:

  • most individuals who live in the UK
  • executors or personal representatives of a deceased person's estate
  • trustees for disabled people

Most other trustees get a lower Annual Exempt Amount.

Customer group 2017-18 2018-19 2019-20
Individuals, personal representatives and trustees for disabled people £11,300 £11,700 £12,000
Other trustees £5,650 £5,850 £6,000

You can use your Annual Exempt Amount against the gains charged at the highest rates to minimise the tax you owe.

Executors and personal representatives

If you're acting as an executor or personal representative for a deceased person's estate, you may get the full Annual Exempt Amount during the 'administration period'. You are entitled to the Annual Exempt Amount for the tax year in which the death occurred and the following two tax years. After that there's no tax-free allowance against gains during the administration period.

Trustees for disabled people

If you're acting as a trustee for a disabled person you use the higher Annual Exempt Amount above - and not the rate for 'other trustees'.

A disabled person in this context is a person who has mental health problems or receives the middle or higher rate of Attendance Allowance or Disability Living Allowance.

People who are 'non-domiciled' in the UK

You won't get the Annual Exempt Amount if you're 'non-domiciled' in the UK and you've claimed the 'remittance basis' of taxation on your foreign income and gains (unless you are dual resident in the UK and the double taxation agreement between the UK and the other country in which you are resident allows it to be claimed).

You may be 'non-domiciled' in the UK, for example, if you were born in another country and intend to return there.

You may have claimed the 'remittance basis' if you have income and gains from abroad and have decided that it's beneficial to be taxed on the foreign income and gains that you bring into the UK, rather than on all income and gains that arise.

Issues of domicile and tax on foreign gains are complicated. For example, the above rules may not apply if your unremitted income is less than £2,000. A lot depends on the facts of each case.

Rates for Capital Gains Tax

Residential Property and carried Interest

  2017-18 2018-19 2019-20
Residential Property: Individuals - Basic rate band 18% 18% 18%
Residential Property: Individuals - Higher rate band 28% 28% 28%
Residential Property: Trustees & Personal Representatives 28% 28% 28%

Other

  2017-18 2018-19 2019-20
Other Assets: Individuals - Basic rate band 10% 10% 10%
Other Assets: Individuals - Higher rate band 20% 20% 20%
Other Assets: Trustees & Personal Representatives 20% 20% 20%
Gains qualifying for Entrepreneurs Relief 10% 10% 10%

Working out your Capital Gains Tax

Whilst Trustees and Personal Representatives pay CGT at the above flat rates, an Individual needs to work out their total taxable income before working out which Capital Gains Tax rate to use.

  1. First work out your taxable income by deducting any tax-free allowances and reliefs that you are entitled to.
  2. Next see how much of your basic rate band is already being used against your taxable income. The basic rate band for 2015-16 is £31,785.
  3. Allocate any remaining basic rate band first against gains that qualify for Entrepreneurs' Relief - these are charged at 10 per cent.
  4. Next allocate any remaining basic rate band against your gains (other than residential property of carried interest), these are charged at 10 per cent.
  5. Next allocate any remaining basic rate band against your gains (other than residential property of carried interest), these are charged at 18 per cent.
  6. Any remaining gains above the basic rate band are charged at 20 or 28 per cent, depending on asset type.

Using your Annual Exempt Amount

If you have gains which are charged at different rates, you need to decide how to use your Annual Exempt Amount. You use it against the gains charged at the highest rates to minimise the tax you owe

Rates and Allowances - Inheritance Tax

  2017-18 2018-19 2019-20
Nil Rate Band (1) £325,000 £325,000 £325,000
Residence Nil Rate Band (2) £100,000 £125,000 £150,000
Gross rate on death 40% 40% 40%
Reduced rate on death (3) 36% 36% 36%
Lifetime transfer rate 20% 20% 20%

(1) any Nil Rate Band which is unused on a person's death can be transferred to the surviving spouse or civil partner

(2) Residence nil rate band available on residential property left to direct descendent.

(3) A reduced rate of 36% applies where at least 10% of the net estate is left to a registered charity

Stamp Duty Land Tax rates and thresholds

Stamp Duty Land Tax (SDLT) is charged on land and property transactions in the UK. The tax is charged at different rates and has different thresholds for different types of property and different values of transaction.

The tax rate and payment threshold can vary according to whether the property is in residential or non-residential use, and whether it is a freehold or leasehold. SDLT relief is available for certain kinds of property or transaction.

This guide provides an overview of the SDLT rates and provides links to related guidance where necessary.

SDLT rates for residential property

The table below applies for all freehold residential purchases and transfers and the premium paid for a new lease or the assignment of an existing lease. (If the property will be used for both residential and non-residential purposes the rates differ - please see the section 'SDLT for non-residential or mixed use property').

Residential land or property SDLT rates and thresholds
Band of consideration (1) Rate
£0 - £125,000 0%
£125,001 - £250,000 2%
£250,001 to £925,000 5%
£925,001 to £1,500,000 10%
Over £1,500,001 12%
'Non-natural persons' (2) (3) 15%

(1) Rates are charged on the portion of consideration that falls within each band

(2) 'Non-natural person' includes companies, partnerships and collective investment schemes

(3) Rate applies to total consideration where consideration exceeds £500,000. Where consideration is £500,000 or less, then the normal banding above applies (0% on first £125,000, etc.)

(4) With effect from 1 April 2016, a higher rate of an additional 3% is applied where you own more than one residential property

SDLT on rent - new residential leasehold purchase

When a new residential lease has a substantial annual rent, SDLT is payable on both of the following, which are calculated separately and then added together:

  • the lease premium (purchase price) - see the table above
  • the 'net present value' (NPV) of the rent payable

The NPV is based on the value of the total rent over the life of the lease and can be worked out using HMRC's online calculator (link below).

Net present value of rent - residential SDLT rate
£0 - £125,000 Zero
Over £125,000 1% of the value that exceeds £125,000

SDLT rates for non-residential or mixed use properties

Non-residential property includes:

  • commercial property such as shops or offices
  • agricultural land
  • forests
  • any other land or property which is not used as a dwelling
  • six or more residential properties bought in a single transaction

A mixed use property is one that incorporates both residential and non-residential elements.

The table below applies for freehold and leasehold non-residential and mixed use purchases and transfers.

If the transaction involves the purchase of a new lease with a substantial annual rent, there may be additional SDLT charge to that shown below, based on the rent. See the later section and table for more detail.

Non-residential land or property rates and thresholds

Purchase price/lease premium or transfer value (non-residential or mixed use) SDLT rate
Up to £150,000 0%
Over £150,000 to £250,000 2%
Over £250,000 5%

SDLT on rent for new leasehold properties

(non-residential or mixed use)

Net present value of rent SDLT rate
Up to £150,000 0%
Over £150,000 to £5,000,000 1%
Over £5,000,000 2%

Due Dates

Deadlines for sending in your tax return

Individuals and Trusts

31 October: paper returns

If you send a paper tax return it must reach HMRC by midnight on 31 October.So for the 2017-18 tax year (ending on 5 April 2018), the deadline for paper returns is midnight on 31 October 2018.

There are very few exceptions. As an example, the deadline may be later if HMRC send you the letter, telling you to complete a tax return, after 31 July. In this case the letter will tell you the deadline - it is usually three months from the date of the letter. Or if you're sending a Self Assessment return for a registered pension scheme or non-resident company, you can only send paper returns so the deadline isn't until 31 January.

31 January: online returns

Your online tax return must reach HMRC by midnight on 31 January.

So for the 2017-18 tax year, the deadline for online returns is midnight on 31 January 2019 There are very few exceptions. As an example, the deadline may be later if HMRC sends you the letter, telling you to complete a tax return, after 31 October. In this case the letter will tell you the deadline - it is usually three months from the date of the letter. There's also an earlier deadline of 30 December if you want HMRC to collect any tax you owe through your tax code. You can ask for this if you owe less than £3,000. Please show this clearly on your tax return. HMRC will try to collect the tax due through your code, but they can't always do so.

Companies

The filing date for CTSA APs is defined in Para 14 Schedule 18 FA 1998. The filing date for CTPF APs is defined under Section 11(4) and (5) TMA 1970.

The statutory filing date under Para 14 Schedule 18 FA 1998 is the last day of whichever of the following periods is the last to end:

• Twelve months from the end of the period for which the return is made

• If the company's relevant period of account is not longer than 18 months, twelve months from the end of that period

• If the company's relevant period of account is longer than 18 months, 30 months from the beginning of that period

• Three months from the date on which the notice requiring the return was served

Note: In this context 'relevant period of account' means the period of account of the company in which the last day of that accounting period falls. 'Period of account' means a period for which the company makes up accounts.

Deadlines for payment of tax

Individuals and Trusts

HMRC need POAs from most customers that were included in the SA system for the previous tax year.

When POAs are needed for any tax year, they are payable on the legal due dates.

POA1 by 31 January of that tax year.

POA2 by the 31 July that falls directly after the tax year.

Any further tax is due as a final Balancing Charge and is payable by the next 31 January following the relevant tax year.

Companies

Payment deadlines if your company or organisation's taxable profits are £1.5 million or less

If your company or organisation has taxable profits of up to £1.5 million, you must pay your Corporation Tax by the normal due date, which is nine months and one day after the end of your Corporation Tax accounting period. For example, if your company's accounting period ends on 31 May, your Corporation Tax payment is due on or before 1 March the following year.

Payment deadlines if your company or organisation's taxable profits are more than £1.5 million

If your company's profits for an accounting period are at an annual rate of more than £1.5 million, you must normally pay your Corporation Tax for that period in instalments.

Payment deadlines for groups of companies

If you operate a group of companies, you can nominate one of them to pay Corporation Tax on behalf of all of them.

Employers (PAYE)

Electronic Payment Other payments
Employers tax and Class 1 NIC (1) 17 days after the tax month end 14 days after the tax month end
Class 1A NIC 22 July following tax year end 19 July following tax year end
PAYE Settlement and Class 1B 22 October following the tax year end 19 October following the tax year end

(1) 'tax month' ends of the 5th of each month