Tax Card 2024/2025

• The cost of purchasing capital equipment in a business is not a revenue tax deductible expense. However, tax relief is available on certain capital expenditure in the form of capital allowances.
• Plant and machinery allowances may be available on items such as machines, equipment, furniture, certain fixtures in a building (‘integral features‘), computers, cars, vans and similar equipment used in a business.
• There are special rules for cars and certain ‘environmentally friendly’ equipment.
• Plant and machinery allowances may be available to owners of commercial property which is let out to a business.
• The Annual Investment Allowance (AIA) gives a 100% write-off on most types of plant and machinery (but not cars) up to an annual limit.
• Writing down allowances (WDA) are given for expenditure for which AIA is not, or cannot be, claimed.
• A Structures and Buildings Allowance of 3% may be available for qualifying investments to construct new, or renovate old, non-residential structures and buildings.

AIA

• Special rules apply to accounting periods straddling the dates shown in the tables below.
• The AIA may need to be shared between certain businesses under common ownership.

AIA limits – companies

AIA limits – sole traders and partnerships

Other plant and machinery allowances

• Expenditure upon which AIA is not given/claimed will obtain relief through the ‘main rate pool‘ or the ‘special rate pool‘ rather than each item being dealt with separately.
• The annual rate of WDA is 18% in the ‘main rate pool‘ and 6% in the ‘special rate pool‘.
• A 100% first year allowance (FYA) may be available on certain energy efficient plant and cars.

Other allowances

Cars

• For expenditure incurred on cars, costs are generally allocated to one of the two plant and machinery pools.
• AIA is not available on any car but a 100% first year allowance may be available on certain cars. To qualify for first year allowance, the car must be purchased new.

Cars acquired from April 2021

• The cost of purchasing capital equipment in a business is not a revenue tax deductible expense. However, tax relief is available on certain capital expenditure in the form of capital allowances.
• Plant and machinery allowances may be available on items such as machines, equipment, furniture, certain fixtures in a building (‘integral features‘), computers, cars, vans and similar equipment used in a business.
• There are special rules for cars and certain ‘environmentally friendly’ equipment.
• Plant and machinery allowances may be available to owners of commercial property which is let out to a business.
• The Annual Investment Allowance (AIA) gives a 100% write-off on most types of plant and machinery (but not cars) up to an annual limit.
• Writing down allowances (WDA) are given for expenditure for which AIA is not, or cannot be, claimed.
• A Structures and Buildings Allowance of 3% may be available for qualifying investments to construct new, or renovate old, non-residential structures and buildings.

AIA

• Special rules apply to accounting periods straddling the dates shown in the tables below.
• The AIA may need to be shared between certain businesses under common ownership.

AIA limits – companies

AIA limits – sole traders and partnerships

Other plant and machinery allowances

• Expenditure upon which AIA is not given/claimed will obtain relief through the ‘main rate pool ‘ or the ‘ special rate pool ‘ rather than each item being dealt with separately.
• The annual rate of WDA is 18% in the ‘ main rate pool ‘ and 6% in the ‘ special rate pool ‘.
• A 100% first year allowance (FYA) may be available on certain energy efficient plant and cars.

Other allowances

Cars

• For expenditure incurred on cars, costs are generally allocated to one of the two plant and machinery pools.
• AIA is not available on any car but a 100% first year allowance may be available on certain cars. To qualify for first year allowance, the car must be purchased new.

Cars acquired from April 2021

• CGT is payable by individuals, trustees and personal representatives (PRs). Companies pay corporation tax on their capital gains.
• There are annual tax-free allowances (the ‘annual exempt amount’) for individuals, trustees and PRs. Companies do not have an annual exempt amount.
• For individuals, net gains are added to total taxable income to determine the appropriate rate of tax. The standard rate applies only to the net gains which, when added to total taxable income, do not exceed the basic rate band.
• Gains which qualify for Investors’ Relief are charged at 10% for the first £10m of qualifying gains.
• Gains which qualify for Business Asset Disposal Relief are charged at 10% for the first £1 million.

Rates and annual exemption

The higher rate applies to higher rate and additional rate taxpayers.

Additionally, higher rates of 18% and 24% may apply to the disposal of certain residential property.

• CGT is payable by individuals, trustees and personal representatives (PRs). Companies pay corporation tax on their capital gains.
• There are annual tax-free allowances (the ‘annual exempt amount’) for individuals, trustees and PRs. Companies do not have an annual exempt amount.
• For individuals, net gains are added to total taxable income to determine the appropriate rate of tax. The standard rate applies only to the net gains which, when added to total taxable income, do not exceed the basic rate band .
• Gains which qualify for Investors’ Relief are charged at 10% for the first £10m of qualifying gains.
• Gains which qualify for Business Asset Disposal Relief are charged at 10% for the first £1 million.

Rates and annual exemption

The higher rate applies to higher rate and additional rate taxpayers.

Additionally, higher rates of 18% and 28% may apply to the disposal of certain residential property.

• The car benefit is calculated by multiplying the car’s list price, when new, by a percentage linked to the car’s CO₂ emissions.
• For diesel cars generally add a 4% supplement (unless the car is registered on or after 1 September 2017 and meets the Euro 6d emissions standard).
• The overall maximum percentage is capped at 37%.
• The list price includes accessories.
• 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.

• The car benefit is calculated by multiplying the car’s list price, when new, by a percentage linked to the car’s CO₂ emissions.
• For diesel cars generally add a 4% supplement (unless the car is registered on or after 1 September 2017 and meets the Euro 6d emissions standard).
• The overall maximum percentage is capped at 37%.
• The list price includes accessories.
• 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 applies if an employee has the benefit of private fuel for a company car.
• The benefit is calculated by applying the percentage used to calculate the car benefit by a ‘fuel charge multiplier’.
• 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.

• Car fuel benefit applies if an employee has the benefit of private fuel for a company car.
• The benefit is calculated by applying the percentage used to calculate the car benefit by a ‘fuel charge multiplier’.
• 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.

Child Benefit is receivable by a person responsible for each child until they reach 16, or 19 if they stay in education or training.

If the person (or their spouse or partner) has ‘adjusted net income‘ above £60,000 the person with the highest income has to pay some of the Child Benefit as a tax charge.

Where adjusted net income is more than £80,000 a year, the tax charge equals the Child Benefit received.

Child Benefit is receivable by a person responsible for each child until they reach 16, or 19 if they stay in education or training.

If the person (or their spouse or partner) has ‘adjusted net income‘ above £50,000 the person with the highest income has to pay some of the Child Benefit as a tax charge.

Where adjusted net income is more than £60,000 a year, the tax charge equals the Child Benefit received.

• Corporation tax rates are set for each Financial Year. A Financial Year runs from 1 April to the following 31 March.
• If the accounting period of a company straddles the 31 March, the profits are apportioned on a time basis to each Financial Year.
• The Northern Ireland Executive has committed to setting the rate of corporation tax at 12.5% when the Northern Ireland Executive demonstrates its finances are on a sustainable footing.

• Corporation tax rates are set for each Financial Year. A Financial Year runs from 1 April to the following 31 March.
• If the accounting period of a company straddles the 31 March, the profits are apportioned on a time basis to each Financial Year.
• The Northern Ireland Executive has committed to setting the rate of corporation
  • Corporation tax rates are set for each Financial Year. A Financial Year runs from 1 April to the following 31 March.
  • If the accounting period of a company straddles the 31 March, the profits are apportioned on a time basis to each Financial Year.
  • The Northern Ireland Executive has committed to setting the rate of corporation tax at 12.5% when the Northern Ireland Executive demonstrates its finances are on a sustainable footing.

  Year to 31.3.24	Profits band £	Rate %
  Small profits rate	0 – 50,000	19
  Marginal rate	50,001 – 250,000	26.5
  Main rate	Over 250,000	25
  Marginal relief fraction	3/200

  For the year to 31.3.23 the main rate of corporation tax was 19%. Special rules apply to accounting periods straddling 1 April 2023. For the year to 31.3.24 the profits limits are reduced for a company with associated companies. Different rates apply for ring-fenced (broadly oil industry) profit.

A personal allowance gives an individual an annual amount of income free from income tax.

Income above the personal allowances is subject to income tax.

The personal allowance will be reduced if an individual’s ‘adjusted net income’ is above £100,000. The allowance is reduced by £1 for every £2 of income above £100,000.

An individual born before 6 April 1935 may be entitled to a married couple’s allowance but this is reduced if ‘adjusted net income’ is above the married couple’s allowance income limit (see table below).

Marriage allowance – 10% of the personal allowance may be transferable between certain spouses where neither pays tax above the basic rate. The Marriage allowance is not available to couples entitled to the Married Couple’s allowance.

A personal allowance gives an individual an annual amount of income free from income tax.

Income above the personal allowances is subject to income tax.

The personal allowance will be reduced if an individual’s ‘adjusted net income’ is above £100,000. The allowance is reduced by £1 for every £2 of income above £100,000.

An individual born before 6 April 1935 may be entitled to a married couple’s allowance but this is reduced if ‘adjusted net income’ is above the married couple’s allowance income limit (see table below).

Marriage allowance – 10% of the personal allowance may be transferable between certain spouses where neither pays tax above the basic rate. The Marriage allowance is not available to couples entitled to the Married Couple’s allowance.

• Income tax applies to the amount of income after deduction of personal allowances.
• Income is taxed in a specific order with savings and dividend income taxed last.
• Dividend income and savings income falling within the dividend and savings allowances still form part of total income of an individual.
• The starting rate band is only applicable to savings income. The 0% rate is not available if the taxable amount of non-savings income exceeds the starting rate band.
• The Scottish Parliament set the rates of income tax and the limits at which these rates apply for Scottish residents on non-savings and non-dividend income.
• Income tax is devolved to Wales on non-savings and non-dividend income.

Income tax rates

• Income tax applies to the amount of income after deduction of personal allowances.
• Income is taxed in a specific order with savings and dividend income taxed last.
• Dividend income and savings income falling within the dividend and savings allowances still form part of total income of an individual.
• The starting rate band is only applicable to savings income. The 0% rate is not available if the taxable amount of non-savings income exceeds the starting rate band.
• The Scottish Parliament set the rates of income tax and the limits at which these rates apply for Scottish residents on non-savings and non-dividend income.
• Income tax is devolved to Wales on non-savings and non-dividend income.

Income tax rates

• Scottish resident taxpayers are liable on non-savings and non-dividend income as set out below.
• Savings income and dividend income are taxed using UK tax rates and bands.

• Scottish resident taxpayers are liable on non-savings and non-dividend income as set out below.
• Savings income and dividend income are taxed using UK tax rates and bands.

• Income tax is devolved to Wales.
• Welsh resident taxpayers continue to pay the same overall income tax rates using the UK rates and bands.
• The total rate of income tax = UK income tax + Welsh rate of income tax
• Savings income and dividend income are taxed using UK tax rates and bands.

• Income tax is devolved to Wales.
• Welsh resident taxpayers continue to pay the same overall income tax rates using the UK rates and bands.
• The total rate of income tax = UK income tax + Welsh rate of income tax
• Savings income and dividend income are taxed using UK tax rates and bands.

The income from ISA investments is exempt from income tax. Any capital gains made on investments held in an ISA are exempt from capital gains tax.

Savers are able to subscribe any amounts into a cash ISA, a stocks and shares ISA or an innovative finance ISA subject to not exceeding the overall annual investment limit.

Investors may transfer their investments from one kind of ISA to another.

The Lifetime ISA is available for those aged between 18 and 40. Save up to £4,000 each year up until the age of 50, and receive a government bonus of 25% (a bonus of up to £1,000 a year). Savers can use some or all of the money to buy their first home, or keep it until they are aged 60 when the account can be accessed tax free. Conditions apply to the account holder and property purchased.  Penalties apply if funds are withdrawn in other circumstances.

A Help to Buy ISA provides a tax free savings account for first time buyers wishing to save for a home. The scheme provides a government bonus to each person who has saved into a Help to Buy ISA at the point they use their savings to purchase their first home. For every £200 a first time buyer saves, the government will provide a £50 bonus up to a maximum bonus of £3,000 on £12,000 of savings. The bonus will be paid in the form of a voucher when the first home is purchased. Conditions apply to the account holder and to the property purchased. Help to Buy ISAs closed to new savers on 30 November 2019. Existing holders can continue saving until 30 November 2029 and will have until 1 December 2030 to claim their bonus.

• The income from ISA investments is exempt from income tax. Any capital gains made on investments held in an ISA are exempt from capital gains tax.Savers are able to subscribe any amounts into a cash ISA, a stocks and shares ISA or an innovative finance ISA subject to not exceeding the overall annual investment limit.Investors may transfer their investments from one kind of ISA to another.The Lifetime ISA is available for those aged between 18 and 40. Save up to £4,000 each year up until the age of 50, and receive a government bonus of 25% (a bonus of up to £1,000 a year). Savers can use some or all of the money to buy their first home, or keep it until they are aged 60 when the account can be accessed tax free. Conditions apply to the account holder and property purchased.  Penalties apply if funds are withdrawn in other circumstances.A Help to Buy ISA provides a tax free savings account for first time buyers wishing to save for a home. The scheme provides a government bonus to each person who has saved into a Help to Buy ISA at the point they use their savings to purchase their first home. For every £200 a first time buyer saves, the government will provide a £50 bonus up to a maximum bonus of £3,000 on £12,000 of savings. The bonus will be paid in the form of a voucher when the first home is purchased. Conditions apply to the account holder and to the property purchased. Help to Buy ISAs closed to new savers on 30 November 2019. Existing holders can continue saving until 30 November 2029 and will have until 1 December 2030 to claim their bonus.
  

  ISA limits 2023/24
  Overall annual investment limit	£20,000
  Junior ISA annual investment limit	£9,000
  Help to Buy ISA monthly subscription limit	£200
  Lifetime ISA annual investment limit	£4,000

• IHT may be payable when an individual’s estate is worth more than the IHT nil rate band when they die.
• Lifetime and death transfers between UK domiciled spouses are exempt from IHT.
• A further nil rate band of £175,000 may be available in relation to current or former residences.
• The IHT threshold available on death may be increased for surviving spouses as there may have been a nil rate band not used, or not fully used, on the first death.
• There are reliefs for some business and farming assets which reduce their value for IHT purposes.
• IHT may also be payable on gifts made in an individual’s lifetime but within seven years of death.
• Some lifetime gifts are exempt.
• Transfers of assets into trust made in an individual’s lifetime may be subject to an immediate charge but at lifetime rates.
• There are also charges on some trusts.

IHT rates and nil rate band 2024/25 and 2023/24

IHT reliefs for lifetime gifts

IHT – reduced charge on gifts within seven years of death

• • MAPs represent the maximum tax free mileage allowances an employee can receive from their employer for using their own vehicle for business journeys.
  • An employer is allowed to pay an employee a certain amount of MAPs each year without having to report payments to HMRC.
  • If the employee receives less than the statutory rate, tax relief can be claimed on the difference.

  MAP rates per business mile 2024/25 and 2023/24

  Cars and vans	Rate per mile
  Up to 10,000 miles	45p
  Over 10,000 miles	25p
  Bicycles	20p
  Motorcycles	24p

• National Minimum Wage rates apply to employees up to the age of 20.
• National Living Wage (NLW) rates apply to employees 21 and over.
• The Apprentice rate applies to apprentices under 19, or 19 and over in the first year of apprenticeship.
• Penalties apply to employers who fail to pay minimum wages.

• National Minimum Wage rates apply to employees up to the age of 22.
• National Living Wage (NLW) rates apply to employees 23 and over.
• The Apprentice rate applies to apprentices under 19, or 19 and over in the first year of apprenticeship.
• Penalties apply to employers who fail to pay minimum wages.

Auto enrolment places duties on employers to automatically enrol ‘workers’ into a work based pension scheme. Employers are required to automatically enrol all ‘eligible jobholders’ into a qualifying pension scheme and pay pension contributions on their behalf.

Where the employer does not make the total minimum contribution the employee is obliged to pay the balance.

Auto enrolment places duties on employers to automatically enrol ‘workers’ into a work based pension scheme. Employers are required to automatically enrol all ‘eligible jobholders’ into a qualifying pension scheme and pay pension contributions on their behalf.

Where the employer does not make the total minimum contribution the employee is obliged to pay the balance.

When you buy shares, you usually pay a tax or duty of 0.5% on the transaction. If you buy shares electronically Stamp Duty Reserve Tax (SDRT) is payable. For shares purchased using a stock transfer form, you will pay Stamp Duty if the transaction is over £1,000.

• SDLT is payable on land and property transactions in England and Northern Ireland.
• Property transactions in Scotland are subject to Land and Buildings Transaction Tax (LBTT).
• Property transactions in Wales are subject to Land Transaction Tax (LTT).

Residential property

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

These rates may be increased by 3% where further residential properties, costing over £40,000, are acquired.

First-time Buyer relief

First-time buyers may be eligible for first-time buyer relief on purchases of residential property up to £625,000. The rates apply to the portion of the total value which falls within each band.

Non-residential SDLT rates

Payable on consideration which falls in each band.

• The basic State Pension is a regular payment from the government that an individual may be entitled to when they reach State Pension age.
• The basic State Pension depends on the number of years an individual has paid National Insurance or has National Insurance credits, eg while unemployed or claiming certain benefits.
• To receive the basic State Pension an individual must have paid or been credited with National Insurance contributions (NIC).
• In 2016 the State Pension was reformed into a single-tier new State Pension. In order to benefit from the full amount the individual will need 35 years, rather than the previous 30 years of NIC or credits for the full amount, with pro-rating where 35 years is not achieved. You will usually need 10 qualifying years to get any State Pension. The amount an individual receives can be higher or lower depending on their National Insurance record. It will only be higher if you have over a certain amount of Additional State Pension.
• Currently an individual may also be entitled to the Additional State Pension. How much an individual gets depends on the number of qualifying years of NIC, the amount of earnings and whether the individual has been contracted out of the scheme.

Enterprise Investment Scheme (EIS)

The Enterprise Investment Scheme (EIS) provides tax relief for individuals prepared to invest in new and growing companies. Investors can obtain generous income tax and capital gains tax (CGT) breaks for their investment and companies can use the relief to attract additional investment to develop their business. Individuals are entitled to relief on investments in certain unquoted trading companies through EIS. A junior version of EIS the SEIS is also available.

Capital gains from the disposal of other assets may be deferred by making an EIS investment.

Seed Enterprise Investment Scheme (SEIS)

The Seed Enterprise Investment Scheme (SEIS) provides tax relief for individuals prepared to invest in new and growing companies. Investors can obtain generous income tax and capital gains tax (CGT) breaks for their investment and companies can use the relief to attract additional investment to develop their business. SEIS is a junior version of EIS.

An individual who makes a capital gain on another asset and uses the amount of the gain to make a SEIS investment will not pay tax on 50% of the gain (subject to certain conditions).

Capital gains from the disposal of other assets may be exempt up to £100,000* per annum by making an SEIS investment.

*Limits subject to Parliamentary approval.

Social Investment Relief (SIR)

Social Investment Relief (SIR) was designed to encourage private individuals to invest in social enterprises including charities.

SIR closed to any new investments from 6 April 2023.

Venture Capital Trusts (VCTs)

Venture Capital Trusts (VCTs) are designed to encourage private individuals to invest in smaller high-risk unquoted trading companies. VCTs operate by indirect investment through a mediated fund. In effect they are very like the investment trusts that are obtainable on the stock exchange, albeit in a high-risk environment. Individuals are entitled to relief on investments in VCTs.

• A Trade Allowance is available to individuals.
• There is an equivalent rule for certain miscellaneous income. This will apply to the extent that the £1,000 trading allowance is not used against trading income.
• The trade allowance is not available against partnership income.

• Van benefit is chargeable if the van is available for an employee’s private use.
• A fuel benefit may also be chargeable if an employee has the benefit of private fuel paid for in respect of a company van.
• The charges do not apply to vans if a ‘restricted private use condition‘ is met throughout the year.
• A reduced benefit charge may apply to vans which cannot emit CO₂ when driven.

• Van benefit is chargeable if the van is available for an employee’s private use.
• A fuel benefit may also be chargeable if an employee has the benefit of private fuel paid for in respect of a company van.
• The charges do not apply to vans if a ‘ restricted private use condition ‘ is met throughout the year.
• A reduced benefit charge may apply to vans which cannot emit CO ₂ when driven.

• Registered businesses charge VAT on their sales. This is known as output VAT and the sales are referred to as outputs.
• Similarly VAT is charged on most goods and services purchased by the business. This is known as input VAT.
• There are three rates: standard which applies to most goods and services, reduced rate for some goods and services such as home energy and zero rate goods and services, for example, most food and children’s clothes.
• Some supplies are exempt from VAT for example postage stamps, financial and insurance transactions.
• A business is required to register for VAT if the value of taxable supplies exceeds the annual registration limit.

• Registered businesses charge VAT on their sales. This is known as output VAT and the sales are referred to as outputs.
• Similarly VAT is charged on most goods and services purchased by the business. This is known as input VAT.
• There are three rates: standard which applies to most goods and services, reduced rate for some goods and services such as home energy and zero rate goods and services, for example, most food and children’s clothes.
• Some supplies are exempt from VAT for example postage stamps, financial and insurance transactions.
• A business is required to register for VAT if the value of taxable supplies exceeds the annual registration limit.

VED bands and rates for cars registered on or after 1 March 2001 but before 1 April 2017

*Including cars emitting over 225g/km registered before 23 March 2006.

For vehicles first registered on or after 1 April 2017, the VED or ‘Road Tax’ rate for the first 12 months is based on CO₂ emissions shown on the V5 (Registration Document).

Subsequent years are charged at the standard rate. Cars with a list price of over £40,000 when new pay an additional rate of £390 per year on top of the standard rate, for five years.

New diesel vehicles that do not meet the Euro 6d emissions standard are charged a supplement on their First Year Rate to the effect of moving up by one VED band.

VED bands and rates for cars first registered on or after 1 April 2017

VED bands and rates for cars registered on or after 1 March 2001 but before 1 April 2017

*Including cars emitting over 225g/km registered before 23 March 2006.