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TAXABLE INCOME BANDS AND TAX RATES

 

2019/20

2018/19

Starting rate* of 0% on savings up to

£5,000

£5,000

Basic rate band

£37,500

£34,500

Higher rate band

£34,501 – £150,000

£33,501 – £150,000

Additional rate band

Over £150,000

Over £150,000

Basic rate

20%

20%

Higher rate

40%

40%

Additional rate

45%

45%

Dividend ordinary rate

7.5%

7.5%

Dividend upper rate

32.5%

32.5%

Dividend additional rate

38.1%

38.1%

* The starting rate does not apply if taxable income exceeds the starting rate limit.

Income tax in Scotland

 

2019/20

2019/20 rates

2018/19

2017/18 rates

Starter rate band

£12,500 – £14,549*

19%

£11,850 – £13,850*

19%

Basic rate band

£14,549 – £24,944

20%

£13,850 – £24,000

20%

Intermediaterate band

£24,944 – £43,430

21%

£24,000 – £43,430

21%

Higher rate band

£43,430 – £150,000

41%

£43,430 – £150,000

41%

Additional rate band

£150,000

46%

£150,000

46%

*Assumes individuals are in receipt of the personal allowance.

Allowances that reduce taxable income or are not taxable

 

2019/20

2018/19

Personal allowance*

£12,500

£11,850

Personal savings allowance:
Basic rate taxpayer
Higher rate taxpayer
Additional rate taxpayer   

 

£1,000
£500
£0

 

£1,000
£500
£0

Dividend allowance at 0%

£2,000

£2,000

Marriage/civil partner transferable allowance**

£1,250

£1,190

Trading allowance and property allowance each***

£1,000

£1,000

Rent a room allowance

£7,500

£7,500

Blind person’s allowance

£2,390

£2,320

* The personal allowance is reduced by £1 for each £2 of income from £100,000 to £123,700 (2017/18, £123,000).
** Any unused personal allowance maybe transferred to a spouse or civil partner who is not liable to higher or additional rate tax.
*** Note that landlords and traders with gross income from each of these sources in excess of £1,000 can deduct the allowance from their gross income as an alternative to claiming expenses.

Allowances that reduce tax

 

2019/20

2018/19

Married couples’/civil partners’ allowance (MCA) tax reduction

£891.50

£869.50

Available to people born before 6 April 1935. The age for MCA is that of the elder spouse or civil partner. The loss of tax reduction is 10p for each £2 of income above £29,600 (2018/19, £28,900) until £345 (2018/19, £336) is reached.

High income child benefit charge

 

2018/19

2017/18

Threshold

£50,000

£50,000

There is a tax charge of 1% of the child benefit received for each £100 that the threshold is exceeded up to a maximum of 100%.

VEHICLE AND FUEL BENEFITS IN KIND

The taxable benefit in kind (BIK) is calculated as a percentage of the car’s UK list price. The percentage depends on the car’s CO2 emissions in grams per kilometre (g/km). Diesel cars which are certified to RDE2 standard are treated as petrol-fuelled.

CO2 Emissions (g/km)

Petrol              

Diesel

0 – 50

16%                     

20%

50 – 75

19%                

23%

75 – 94

22%                    

26%

Over 94

add 1% for every 5g/km or part thereof              

Over 165 (petrol), 145 (diesel)

 37% maximum                               

The list price is on the day before irst registration, including most accessories, and is reduced by any employee's capital contribution (max £5,000) when the car is irst made available.

Where the cost of all fuel for private use is borne by the employee, the fuel beneit is nil. Otherwise, the fuel beneit is calculated by applying the car beneit percentage (above) to £24,100 (£23,400 in 2018/19).

Vans where private use is more than home-to-work travel: £3,430 (£3,350 in 2018/19) beneit and £655 (£633 in 2018/19) for private fuel.

Payments by employees for private use may reduce these beneits in kind. Zero-emission vans have a beneit of £2,058 (£1,340 in 2018/19).

TAX-FREE MILEAGE ALLOWANCES

Cars and vans

First 10,000 business miles

45p

Thereafter

25p

Motorcycles

24p

Bicycles

20p

Business passenger

5p

The tax-free business mileage allowance rates apply for qualifying business journeys incurred by employees using their own vehicles.

For national insurance purposes, a rate of 45p may apply for all business miles incurred for cars and vans.

CAPITAL GAINS TAX

 

2019/20

2018/19

Main rates

Individual basic rate

10%

10%

Individual above basic rate

20%

20%

Trusts and estates

20%

20%

Gains on residential property not eligible for PPR relief and carried interest - surcharge

8%

8%

Annual exemption

Individuals

£12,000

£11,700

Trusts

£6,000

£5,850

Entrepreneurs’ relief

Applicable rate

10%

10%

Lifetime limit

£10m

£10m

Investors’ relief

Applicable rate

10%

10%

Lifetime limit

£10m

£10m

INHERITANCE TAX

 

2019/20

2018/19

Nil-rate band threshold*

£325,000

£325,000

Main residence nil-rate band**

£150,000

£120,000

Combined threshold limit for married couples and civil partners, including main residence nil-rate band

£950,000

£900,000

Relief for businesses, unlisted/AIM companies, certain farmland/farm buildings 100% 100%

* Up to 100% of any unused part of a deceased person’s nil-rate band can be claimed by the surviving spouse/civil partner on their death.This also applies to the main residence nil-rate band, albeit the main residence nil-rate is subject to the taper withdrawal below.
** For estates in excess of £2m, a 50% taper withdrawal applies to the excess.

Tax rates

 

2019/20

2018/19

Main rate

40%

40%

Chargeable on lifetime transfers

20%

20%

Transfers on or within 7 years of death*

40%

40%

Reduced rate**

36%

36%

*All lifetime transfers not covered by exemptions and made within 7 years of death will be added back into the estate for the purposes of calculating the tax payable. This may then be reduced as shown in the next table.
** Applies if 10% or more of net estate given to charity.

Years before death

0 – 3

3 – 4

4 – 5

5 – 6

6 – 7

Tax reduced by

0%

20%

40%

60%

80%

UK COMPANY TAXATION

Financial year from 1 April

2019

2018

Corporation tax rate

19%

19%

Loans to participators

32.5%

32.5%

Diverted profits tax

25%

25%

MAIN CAPITAL ALLOWANCES

Initial allowances

Annual investment allowance:
on irst £1m (excludes cars)*

100%

First-year allowance:
for certain environmentally-beneicial equipment, new and unused electric and low CO2 emission cars (up to 50g/km)

100%

* Applies from 1 January 2019 to 31 December 2020. Transitional rules may apply for chargeable periods spanning these dates.

Writing-down allowances

Plant and machinery main-rate expenditure

18%

Plant and machinery special-rate expenditure

6%

Cars

51g/km – 110g/km

18%

Over 110g/km

8%

Structures and buildings allowance – straight-line relief

2%

Electrical charge point, energy and water-eicient equipment and electric vans

100%

VAT

From 1 April

2019

2018

Standard rate

20%

20%

VAT fraction

1/6

1/6

Reduced rate e.g. on domestic fuel

5%

5%

VAT fraction

1/21

1/21

Taxable turnover limits

From 1 April

2019

2018

Registration (last 12 months or next 30 days) over

£85,000

£85,000

Deregistration (next year) under

£83,000

£83,000

Annual and cash accounting schemes turnover limit

£1.35m

£1.35m

Flat-rate scheme turnover limit

£150,000

£150,000

RESEARCH AND DEVELOPMENT COSTS

Research and development (R&D)

Revenue expenditure – SMEs

230%

Capital expenditure – all companies

100%

SME company R&D payable tax credit

14.5%

Large company R&D taxable expenditure credit*

12%

*Effective from 1 January 2018, replacing previous rate of 11%. 

TAX-EFFICIENT INVESTMENTS

Annual investment limit

2019/20

2018/19

ISA

£20,000

£20,000

Lifetime ISA

£4,000

£4,000

Help to Buy ISA

£1,000 initial and £200 per month

Junior ISA and Child Trust Fund

£4,368

£4,260

Venture Capital Trust at 30%

£200,000

£200,000

Enterprise Investment Scheme (EIS) at 30%

£1m

£1m

Seed EIS (SEIS) at 50%

£100,000

£100,000

SEIS capital gains tax reinvestment relief

50%

50%

Social investment tax relief at 30%

£1m

£1m

* Reduces ISA limit by amount invested in Lifetime ISA.
** Up to £2m in a knowledge-intensive company.

REGISTERED PENSIONS

Lifetime allowance limit

£1.055m

£1.03m

Money purchase annual allowance

£4,000

£4,000

Annual allowance limit

£40,000*

£40,000*

Minimum age for accessing benefits

55

55

On cumulative benefits exceeding

£1.055m

£1.03m

Maximum pension commencement lump sum

25% of pension fund value

*Tapered at a rate of 50% of income down to £10,000 if threshold income over £110,000 and adjusted income over £150,000. Restrictions may also apply based on net relevant earnings.

Subject to certain conditions, the unused amount of the annual allowance can be carried forward up to 3 years and used once the current year annual allowance has been fully utilised.

NATIONAL INSURANCE

Class 1

Weekly earnings

Employee

Employer

Up to £166 Nil* Nil
£166 to £962 12% 13.8%**
Over £962 2%  
Over state pension age 0% 13.8%

* Entitlement to contribution-based beneits are retained for earnings between £118 and £166 per week.

** 0% for employees under 21 and apprentices under 25 on earnings up to £962 per week.

Class 1A

On relevant benefits, including car and fuel benefits

13.8%

Class 2

Self-employed above small profits threshold

£3 per week

Small profits threshold

£6,365 per annum

Class 3

Voluntary

£15 per week

Class 4*

Self-employed on proits £8,632 – £50,000

9%

Over £50,000

2%

* Exemption applies if the state retirement age is reached by 6 April 2019.

Employment allowance

Per employer, per year (excludes one-person companies)

£3,000*

* One claim only for companies in a group or under common control. Not available where the director is the only employee paid earnings above the secondary threshold for class 1 NICs. From April 2020, this will be limited to employers with an employer NICs bill below £100,000 in the previous tax year.

Apprenticeship levy

A levy of 0.5% applies where the pay bill exceeds £3m. There is an allowance of £15,000. Further conditions apply so please consult with us.

IMPORTANT NOTICE

These rates and allowances are based on Budget 2018 announcements made by the UK and Northern Ireland, Scottish and Welsh Governments and are for information only.

All information is subject to change before 6 April 2019 and conirmation by the respective governments. The above must not be considered advice and no warranty is given for the accuracy or completeness of the details. Professional advice should be sought before making any decisions.

STAMP DUTY

Consideration on shares over £1,000 0.5%

PROPERTY TAXES

The incremental rate of tax is only payable on the part of the property price within each band. An additional 3% rate (4% in Scotland) applies to the purchase of an additional residential property above £40,000 and all corporate residential properties.

On the transfer of residential property                    

On the transfer of non-residential property

£0 – £125,000

0%

Less than £150,000

0%

£125,000 – £250,000

2%

£150,000 – £250,000

2%

£250,000 – £925,000

5%

Over £250,000

5%

£925,000 – £1.5m

10%

 

 

Over £1.5m

12%

 

 

* First-time buyers pay nothing on the irst £300,000 for properties up to £500,000. A rate of 5% applies between £300,000 and £500,000. For residential purchases by ????non-natural persons???? over £500,000 a rate of 15% applies, subject to certain exclusions.

Scotland – land and buildings transaction tax

On the transfer of residential property                   

On the transfer of non-residential property

£0 – £145,000

0%

£0 – £150,000

0%

£145,000 – £250,000

2%

£150,000 – £250,000   

1%

£250,000 – £325,000

5%

Over £250,000     

5%

£325,000 – £750,000

10%

 

 

Over £750,000

12%

 

 

* First-time buyers pay nothing on the irst £175,000.

Wales from 1 April 2018 – proposed land transaction tax

On the transfer of residential property                   

On the transfer of non-residential property

£0 – £180,000

0%

£0 – £150,000

0%

£180,000 – £250,000

3.5%

£150,000 – £250,000   

1%

£250,000 – £400,000

5%

£250,000 – £1m       

5%

£400,000 – £750,000

7.5%

Over £1m

6%

£750,000 – £1.5m

10%

 

 

Over £1.5m

12%

 

 

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