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Income Tax

 2017-182016-17
Basic rate band – income up to †£33,500 £32,000
Starting rate for savings *0% 0%
Basic rate 20% 20%
Dividend ordinary rate **7.5% **7.5%
Higher rate – income over †£33,500 £32,000
Higher rate 40% 40%
Dividend upper rate **32.5% **32.5%
Additional rate – income over £150,000 £150,000
Additional rate 45% 45%
Dividend additional rate **38.1% **38.1%
Starting rate limit (savings income) *£5,000 *£5,000

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

*If an individual’s taxable non-savings income exceeds starting rate limit, then starting rate limit for savings will not be available for savings income. £1,000 of savings income for basic rate taxpayers (£500 higher rate) may be tax-free. **The first £5,000 of dividends are tax-free.

Personal allowances (PA) £11,500 £11,000
Married couple’s allowance (MCA) (relief 10%)    
Either partner born before 6 April 1935 *£8,445 *£8,355
Transferable Tax Allowance  
for certain married couples (relief 20%) £1,150 £1,100

*Allowances are reduced by £1 for every £2 that adjusted net income exceeds £28,000 (£27,700) to a minimum MCA of £3,260 (£3,220). Where adjusted net income exceeds £100,000, PA is reduced in the same way until it is nil regardless of the individual’s date of birth.

Tax Shelters  
Venture Capital Trust up to £200,000 £200,000
Enterprise Investment Scheme up to £1,000,000 £1,000,000
Seed Enterprise Investment Scheme up to £100,000 £100,000
Social Investment Tax Relief £1,000,000 £1,000,000

Tax-Free Savings Accounts for 2017-18

ISA subscription limit £20,000; Junior ISA and CTF subscription limit £4,128.

Company Cars and Vans

Company car benefit is calculated by applying the appropriate percentage (based on the car’s CO2 emissions – see table below) to the car’s UK list price.

CO2 emissions (g/km)Appropriate %CO2 emissions (g/km)Appropriate %
PetrolDieselPetrolDiesel
0 - 50 9 12 150 - 154 29 32
51 - 75 13 16 155 - 159 30 33
76 - 94 17 20 160 - 164 31 34
95 - 99 18 21 165 - 169 32 35
100 - 104 19 22 170 - 174 33 36
105 - 109 20 23 175 - 179 34 37
110 - 114 21 24 180 - 184 35
115 - 119 22 25 185 - 189 36
120 - 124 23 26 190 - 194 37
125 - 129 24 27 195 - 199
130 - 134 25 28 200 - 204
135 - 139 26 29 205 - 209
140 - 144 27 30 200 and above
145 - 149 28 31

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 % to the car fuel benefit charge multiplier (£22,600). 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.

Company van benefit is generally not related to CO2 emissions but is a set figure of £3,230 with an extra £610 where fuel for private use is provided. Van benefit charge for zero emission vans £646.

Employees using their own cars for business: Approved mileage allowance payments are 45p per mile for the first 10,000 miles in the tax year and 25p thereafter. Income tax and NICs may be due on higher rates and tax relief may be available on lower rates.

Capital Gains Tax

On chargeable gains 2017-18 Total taxable income and gains: Up to higher rate threshold 10% • From higher rate threshold 20% • Trust rate 20%. Higher rates (18/28%) may apply to the disposal of certain residential property.

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 £10m • Annual exempt amount – individuals £11,300 and most trustees £5,650.

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. The annual allowance may be reduced by £1 for every £2 of adjusted income over £150,000 to a minimum of £10,000. Maximum age for tax relief is 74. Minimum age for taking benefits is 55. Lifetime allowance charge – lump sum paid 55% and monies retained 25% on cumulative benefits exceeding £1 million*. Maximum tax-free lump sum 25%*. *Subject to transitional protection for excess amount.

Inheritance Tax

Inheritance Tax 2017-18 2016-17
Nil rate band £325,000 £325,000
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.
Rate of tax on balance:
Chargeable lifetime transfers 20% 20%
Transfers on, or within 7 years of, death 40% 40%
subject to a tapered reduction for transfers between 7 and 3 years before death

National Insurance Contributions

Class 1Employee (primary)Employer (secondary)
Payable on weekly earnings of:    
Below £113 (lower earnings limit) Nil -
£113 - £157 (primary threshold) *0% -
Up to £157 (secondary threshold) - Nil
Above £157 - 13.8%
£157.01 - £866 (upper earnings limit) **12% -
£157.01 - £866 (under 21s and apprentices under 25) - 0%
Above £866 **2% -
*No NICs are actually payable but notional Class 1 NIC is deemed to have been paid; this protects contributory benefit entitlement.
**Over state pension age, the employee contribution is generally nil..

Employment Allowance

up to £3,000 (per year) Class 1A On relevant benefits 13.8% Class 2 Self employed £2.85 per week; small profits threshold £6,025 per annum Class 3 Voluntary £14.25 per week Class 4 Self employed on profits £8,164 - £45,000 *9%; excess over £45,000 *2%
*Exemption applies if state pension age was reached by 6 April 2017.

Stamp Duty Land Tax

On the transfer of property in England, Wales and N.Ireland, the Stamp Duty Land Tax is:
Residential  
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%

 

Non-residential
Value up to £150,000 0%
Over £150,000 – £250,000 2%
Over £250,000 5%

The rates apply to the portion of the total value which falls within each band. Additional SDLT of 3% may apply to the purchase of additional residential properties.

Capital Allowances

Plant and Machinery: Investment for use in Enterprise Zones, energy saving and environmentally beneficial equipment, new low CO2 emission (up to 75g/km*) cars, natural gas/hydrogen refuelling equipment First Year Allowance (FYA) 100% • Annual Investment Allowance (AIA) 100% – on first £200,000 of investment. Excludes cars and expenditure not qualifying for 100% FYA • Writing Down Allowance on expenditure not qualifying for AIA or FYA: Long-life assets, integral features of buildings, cars over 130g/km* 8% • Other plant and machinery 18%

*The emissions figures are reduced to 50 and 110g/km respectively for expenditure incurred on or after 1 April 2018.

Value Added Tax

From 1 April 2017
Standard Rate 20%
VAT Fraction 1/6
Reduced Rate 5%
Current Turnover Limits
Registration – last 12 months/next 30 days over £85,000 from 1 April 2017
Deregistration – next year under £83,000 from 1 April 2017
Annual and Cash Accounting Schemes £1,350,000
Flat Rate Scheme £150,000

Corporation Tax

Financial Year to 31 March 2018 31 March 2017
Corporation Tax rate 19% 20%

Selected Rates

Basic Retirement Pension – Single person £122.30
  – Couple £195.60
Pension Credit Standard Minimum Guarantee – Single person £159.35
  – Couple £243.25
New State Pension   £159.55

Child Benefit is paid at £20.70 (first eligible child) or £13.70 (each subsequent child).

Statutory Pay qualification – average weekly earnings (AWE) £113 or over.

Sick (SSP) The standard rate is £89.35 per week for up to 28 weeks.

Maternity (SMP), Adoption (SAP) and Paternity (SPP) paid at the lower of £140.98 or 90% of AWE apart from first 6 weeks of SMP and SAP which are paid at 90% of AWE. SMP and SAP are payable for up to 39 weeks. SPP is payable for up to 2 weeks.

Jobseeker's Allowance is paid at £73.10 (single person - 25 or over) or £114.85 (couple – both 18 or over). Universal Credit (monthly rates) – Standard allowance for a single person (25 or over) is £317.82. The couple's rate (where one or both are 25 or over) is £498.89. The new Universal Credit is being phased in gradually.

National Living Wage – Workers aged 25 and over – £7.20 from April 2016 and £7.50 from April 2017.

National Minimum Wage: Age 21-24 18-20 16 and 17 Apprentices*
From 1 October 2016 £6.95 £5.55 £4.00 £3.40
From 1 April 2017 £7.05 £5.60 £4.05 £3.50
* Rate applies to apprentices under 19, or 19 and over in the first year of apprenticeship...

Key Dates & Deadlines

Payment Dates   2017-18 2016-17
Income Tax and Class 4 NICs      
1st payment on account 31 January 2018 2017
2nd payment on account 31 July 2018 2017
Balancing payment 31 January 2019 2018
Capital Gains Tax 31 January 2019 2018
Class 1A NICs 19 July 2018 2017

Corporation Tax – 9 months and one day after the end of accounting period (or by quarterly instalments if large company)

2016-17 Returns Filing Deadlines:31 May 2017 - Issue P60s to employees • 6 July 2017 - P11D and P11D(b) and appropriate copies to employees • 31 October 2017 - Self Assessment Tax Return (SATR) - paper version • 30 December 2017 - SATR
Online where outstanding tax (subject to cap) to be included in 2018-19 PAYE code • 31 January 2018 - SATR Online

Under Real Time Information most employers must notify HMRC of payments and deductions on or before the time of payment. Some concessions apply. Budget Day edition. Rates subject to change – contact us for latest. For general guidance only, no
responsibility is taken for action taken or refrained from in consequence of card contents.

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