Tax Tables 2018/19 Assisting finance professionals to pass industry exams and helping meet their CPD requirements with our accredited CPD system Wizard Learning Ltd 1. Income Tax rates 2. Personal Allowances 3. Child Tax Credit 4. Working Tax credit 5. Company Cars 6. National Insurance Contributions 7. Capital Gains Tax 8. ISA Subscription Limits 9. Value Added Tax 10. Stamp Duties 11. Corporation Tax 12. Pension Contributions 13. Inheritance Tax 1. Income Tax Rates Each year, the rates of Income Tax are set in the annual budget. It is charged at increasing rates, depending on the amount of income an individual has and from where it has arisen. 2018/19 2017/18 Rate % Band Rate % Band 0 1-5,000 * 0 1-5,000 * 20 1-34,500 20 1-33,500 40 34,500-150,000 40 33,500-150,000 45 Over 150,000 45 Over 150,000 * The 0% starting rate is applied for savings income, applicable where non-savings taxable income after allowances is under 5,000. If non-savings taxable income exceeds 5,000 then the 0% starting rate for savings will not apply. Page 1 v81.1
On 20 February 2018, the Scottish Government set the following income tax rates for Scotland. Bands Band name Rates (%) Over 11,850*- 13,850 Starter Rate 19 Over 13,850-24,000 Basic Rate 20 Over 24,000-43,430 Intermediate Rate 21 Over 43,430-150,000** Higher Rate 41 Above 150,000** Top Rate 46 * Assumes person is in receipt of the Standard UK Personal Allowance ** Personal Allowance is reduced by 1 for every 2 earned over 100,000. In England and Wales, the 20% rate applies to income up to 34,500 in the current tax year is known as the basic rate and the 40% rate on income in excess of 34,500 is known as the higher rate. The 45% rate on income in excess of 150,000 is known as the additional rate. A new Personal Savings Allowance (PSA) was introduced in the 2016/17 tax year on interest received from savings. Basic rate taxpayers have an allowance of 1,000 on which no tax will be paid, and higher rate taxpayers have an allowance of 500 on which no tax will be paid. Additional rate taxpayers have no PSA and any interest received will be taxed in full. Another change that took effect from the 2016/17 tax year onwards is the payment of savings interest gross, i.e. with no income tax deducted at source. Prior to 6 April 2016, interest was paid net of 20% income tax. Higher rate and additional rate taxpayers paid further income tax of 20% and 25% respectively of the grossed-up interest, basic rate taxpayers had no further tax to pay on the interest, and nontaxpayers could reclaim the tax already deducted. Until 2015/16, dividend income was paid with a 10% tax credit. This was representative of the tax already paid by the company on its profits and, although not income tax, it was deemed to satisfy the basic rate tax liability to income tax on dividends. So, the tax rates for dividend income were 10% (income up to the basic rate), 32.5% (higher rate) and 37.5% (additional rate). Higher rate and additional rate taxpayers paid an additional 22.5% and 27.5% respectively of the grossed-up dividend. Basic rate taxpayer had no further tax liability, nor did non-taxpayers, although this 10% tax credit was not reclaimable, not by anyone. This changed from the start of the 2016/17 tax year. The 10% tax credit was removed and dividends are now paid gross. In 2018/19, all individuals have a dividend allowance of 2,000 on which no income tax will be charged. Dividend income in excess of 2,000 in the tax year will be charged at 7.5% for basic rate taxpayers, 32.5% for higher rate taxpayers and 38.1% for additional rate taxpayers. Page 2 v81.1
2. Personal Allowances 2018/19 2017/18 Personal * 11,850 11,500 Married couples (and civil partners) allowance 3,360 3,260 (born before 6/4/1935) minimum at 10% ** Married couples (and civil partners) allowance 8,695 8,445 (born before 6/4/1935) maximum at 10%** Marriage Allowance*** 1,190 1,100 Age related allowances reduced by 1 for every 28,900 28,000 2 of income over: (Married, born before 6/4/35)** Rent-a-room 7,500 7,500 Blind Persons Allowance 2,390 2,320 Enterprise Investment Scheme relief limit at 30% 2,000,000**** 1,000,000 Venture Capital Trust relief limit at 30% 200,000 200,000 Seed Enterprise Investment Scheme at 50% 100,000 100,000 Seed Enterprise Investment Scheme CGT 50% 50% reinvestment relief Social Investment Tax Relief 30% 1,000,000 / 1,500,000 for enterprises up to 7 years old 1,000,000 * The Personal Allowance will be reduced by 1 for every 2 where net income exceeds 100,000 with no personal allowance above 123,700 in 2018/19 (was 123,000 in 2017/18) ** Married couples and civil partners where at least one of the couple was born before 6/4/1935 are entitled to the married couples allowance. This is a restricted allowance, i.e. it does not increase the amount of income that can be received before tax is payable; instead it reduces the tax bill by 10% of the amount of allowance the individual is entitled to. It is subject to the income limit of 28,900, which means that those with income under this amount will receive the full married couples allowance However, this allowance is lost at a rate of 1 for every 2 of income that exceeds 28,900. When income reaches 39,570, the married couples allowance is reduced to its lowest level of 3,360. *** Available for those born after 5 April 1938 a basic rate or non-taxpayer can transfer up to 10% of the personal allowance ( 1,190 2018/19) to a spouse or civil partner who is not a higher or additional rate taxpayer. **** Above 1,000,000 must be in knowledge intensive companies Certain Income Tax reliefs are capped at the greater of 50,000 or 25% of income. This excludes charitable donations. An additional tax charge applies to claw back child benefit (by 1% for every 100 of income) where one income in a household exceeds 50,000, with full claw back by 60,000. Page 3 v81.1
3. Child Tax Credit MAXIMUM AMOUNT 2018/19 Family element - the basic payment if responsible for one or 545 more children Child element - for each child under 16, paid on top of the 2,780 family element Disabled child element (additional to child element) 3,275 Severely disabled child element, paid on top of any disability 1,325 element A qualifying young person is a person aged under 20 in full-time non-advanced education or on an approved unwaged job-related training scheme. A family can only receive one family element regardless of the number of children. Child tax credit may not be paid if there is one child and the annual income is more than 40,000, there are two children and the annual income is more than 55,000, or there are three children and the annual income is more than 65,000. If the household does not have childcare costs to take into account, the limits are 25,000, 35,000 and 40,000 respectively. Payments are made in relation to each individual s unique personal circumstances. 4. Working Tax Credit MAXIMUM IN 2018/19 Basic 1,960 Second adult in family 2,010 Lone parent 2,010 30 hour element (where one person works 810 at least 30 hours) Disability (for each disabled worker) 3,090 Severe disability (for each disabled 1,330 worker) Childcare: one child Entitled to 70% of eligible childcare costs, which are capped at 175/week (max entitlement 175 x 70% = 122.50) Childcare: two or more children Entitled to 70% of eligible childcare costs, which are capped at 300/week (max entitlement 300 x 70% = 210) All the elements of both child and working tax credit are tapered by reference to the claimant s circumstances. The maximum amounts payable are initially calculated without reference to income. A reduction is then made with reference to the amount of income. For child tax credit, where income exceeds 16,105 it will be reduced by 41%. For working tax credit, it is also reduced by 41% for income over 6,420. Families who receive income support, income-based jobseekers allowance and pension credit are automatically entitled to the full child tax credit without reference to income. A couple with children are required to work at least 24 hours between them in order to qualify, in addition to the requirement that one of the couple works at least 16 hours per week, although payment depends on individual circumstances. Page 4 v81.1
4A Tax credits income thresholds The tax credits income thresholds and withdrawal rates are shown below. Income thresholds and withdrawal rates - per year (unless stated) 2018/19 2017/18 Rates and Thresholds First income threshold 6,420 6,420 First withdrawal rate (per cent) 41% 41% Second income threshold Withdrawn Withdrawn First threshold for those entitled to Child Tax 16,105 16,105 Credit only Income rise disregard 2,500 2,500 Income fall disregard 2,500 2,500 5. Company Cars Car benefit Calculated as a percentage of the list price based on the vehicles CO2 emissions. CO2 emissions grams per kilometre Percentage charge Petrol Percentage Charge Diesel 0-50 13% 17% 51-75 16% 20% 76-94 19% 23% 95-99 20% 24% 100-104 21% 25% 105-109 22% 26% 110-114 23% 27% 115-119 24% 28% 120-124 25% 29% 125-129 26% 30% 130-134 27% 31% 135-139 28% 32% 140-144 29% 33% 145-149 30% 34% 150-154 31% 35% 155-159 32% 36% 160-164 33% 37% 165-169 34% 37% 170-174 35% 37% 175-179 36% 37% 180 and over 37% 37% Zero emission cars (e.g. electric) have no taxable benefit. Fuel benefit: Calculated as a percentage of 23,400 Percentage used is from the above table. Page 5 v81.1
Minimum at 13% 3,042 Maximum at 37% 8,658 Private Vehicles Used For Work: Cars On the first 10,000 business miles in tax year Each business mile above 10,000 business miles Motor Cycles Bicycles Qualifying passenger 45p per mile 25p per mile 24p per mile 20p per mile 5p per mile 6. National Insurance Contributions Thresholds and rates Thresholds 2018/19 Weekly Monthly Yearly Lower Earnings Limit (LEL) 116 503 6,032 Primary earnings threshold (employees) 162 702 8,424 Secondary earnings threshold (employers) 162 702 8,424 Upper earnings limit (UEL) 892 3,863 46,350 Class 1 employee contribution rates Rates Total earnings per week Up to 162.00 Nil 162.01 892.00 12% Above 892.00 2% Class 1 employer contribution rates 2018/19 based on earnings above the employers secondary earnings threshold of 162 per week. 13.8% From April 2014, businesses and charities can claim a reduction of up to 3,000 (2018/19) of their employers contributions (NIC employment allowance). This is not available if a director is the sole employee. In 2018/19, no employer s contributions are payable in respect of weekly earnings up to 892 paid to employees under age 21 or age 25 for apprentices. Page 6 v81.1
Reduced rate Class 1 (married women) Employee: 162-892 per week 5.85% Above 892 per week 2% Employer: 13.8% Class 1A contributions: Flat rate of 13.8%. Maximum Class 1 contributions from multiple employments 53 x 730 ( 892-162) x 12% = 4,642.80 Class 2 (self-employed) Class 3 (voluntary) Flat rate - 2.95 per week / 153.40 per year where earnings exceed 6,205 Flat rate - 14.65 per week / 761.80 per year Class 4 (self-employed) 9% on profits between 8,424 and 46,350 plus 2% on profits above 46,350. 7. Capital Gains Tax Exemptions 2018/19 2017/18 Individuals, estates etc 11,700 11,300 Trusts generally 5,850 5,650 Chattels proceeds (5/3 excess gain is taxable) 6,000 6,000 Rates Nil and Basic Rate taxpayers 10%* 10% Higher and additional rate taxpayers 20%* 20% Trusts and estates 20%* 20% * Rates of capital gains tax remain at 18% and 28% for gains made from property. For all other gains, the rates of capital gains tax are 10% and 20% (2018/19) The amount of gain is added to the individual's other income in the tax year to establish the rate of tax to be paid. Any part of the gain falling into the basic income tax rate band is charged at the lower rate and any excess is charged at the higher rate. Entrepreneur s Relief Gains made from 23/6/2010 that qualify for the relief are taxed at the flat rate of 10%. From 05/04/11 the lifetime limit has been set at 10,000,000. For trading businesses and companies (minimum 5% employee shareholding) held for 1 year or more. Page 7 v81.1
8. ISA Subscription Limits ISA 2018/19 * 20,000 Junior ISA 2018/19 ** 4,260 Lifetime ISA 4,000 Help to Buy ISA (from 1 Dec 2015) 1,000 initial and 200/month * Investment can be in cash or shares. ** From April 2015, cash in a Child Trust Fund can be transferred to a Junior ISA. 9. Value Added Tax Standard Rate 20% Reduced rate 5% Zero-rate 0% Annual registration limit 85,000 De-registration threshold 83,000 Flat rate scheme turnover limit 150,000 Cash and annual accounting schemes turnover limit 1,350,000 10. Stamp Duties Stamp Duty Land Tax England and Wales Non Residential Land and Buildings Property Value: 0-150,000 0% 150,001-250,000 2% Over 250,000 5% Residential Land and Buildings (rates applied cumulatively from 4 December 2014) Property value: Up to 125,000 0% 125,001-250,000 2% 250,001-925,000 5% 925,001-1,500,000 10% Over 1,500,000 12% Page 8 v81.1
Rates for first-time buyers purchasing properties worth 500,000 or less Property value Rate (on portion of value above threshold) applicable to completions on or after 22 November 17 if purchase qualifies for firsttime buyer relief 0 to 300,000 0% 300,000 to 500,000 5% Over 500,000 Standard rates above apply Scotland Land & Buildings Transaction Tax (LBTT) Non Residential Land and Buildings (from 1 April 2015) Property value: 0-150,000 0% 150,001-350,000 3% Over 350,000 4.5% Residential Land and Buildings (from 1 April 2015) Property value: 0-145,000 0% 145,001-250,000 2% 250,001-325,000 5% 325,001-750,000 10% * Over 750,000 12% * For residential properties purchased by companies (or similar entities) over 500,000 the rate is 15%. Second properties over 40,000 add 3% to each band of Stamp Duty Land Tax and Land & Buildings Transaction Tax from 1/4/16. Stamp Duty and Stamp Duty Reserve Tax Shares and Securities - Standard rate 0.5% of the consideration paid * Stamp Duty Reserve Tax 0.5% / 1.5% (depending on whether electronic or paper transaction) * No charge unless amount due exceeds 5 Both taxes were abolished from 30 March 2014 on recognised growth markets, including AIM and ISDX. Page 9 v81.1
11. Corporation Tax Financial Year Year to 31/3/2019 Full rate on profits 19% Diverted profits 25% Capital Allowances Plant & machinery 100% annual investment allowance (1 st year) * 200,000 Writing down allowance Plant & machinery, patent rights, know-how (reducing balance) per annum 18% Plant and machinery in certain enterprise zones (max 125m per investment project) 100% Energy-saving and water efficient plant and machinery 100% Renovation of business premises (disadvantaged areas) 100% *There is a 100% annual investment allowance on the first 200,000 tranche per annum of capital expenditure incurred on or after 1 January 2016, per group of companies or related entities, on plant and machinery including long life assets and integral features, but excluding cars. Certain long-life assets, integral features of buildings (reducing balance) per annum 8% Enterprise zone, commercial and industrial buildings** 100% Motor cars CO2 75g/km or less (new cars in first year) 100% CO2 51-130g/km (reducing balance) 18% CO2 over 130g/km or more (reducing balance) 8% New and unused zero emissions goods vehicles 100% Patent rights and know how *** 25% Research & Development Capital expenditure 100% Tax credits SME scheme 230% Tax credits large companies scheme 12% Film Tax relief: Limited budget (up to 20 million) 25% Large budget (over 20 million) 25% on the first 20 million, 20% on additional expenditure. Until April 2016, a wear and tear allowance equivalent to 10% of the rental income was given to landlords to reflect the cost of the upkeep of rented property. In April 2016, this was abolished and now Replacement Relief exists, allowing landlords to offset the actual cost of replacement items, capped at the cost of a modern equivalent if the new items improves the old one. ** All enterprise zone designation periods have now ended. A balancing charge is made if the building is sold within 25 years of its first use. Page 10 v81.1
12. Pension Contributions Lifetime Allowance Annual Allowance* 2017/18 1 million 2017/18 40,000** 2018/19 1,030,000 2018/19 40,000** * In some circumstances carry forward may also be allowed from the previous three tax years, by reference to a limit of 40,000 per annum (since the annual allowance has remained at a constant 40,000 since 2014/15). ** Subject to 50% taper down to 10,000 if threshold income over 110,000 and net adjusted income over 150,000. Money Purchase Annual Allowance 2017/18 4,000 2018/19 4,000 Annual allowance charge Between 20% to 45% tax charge (depending on taxable income) on the amount of total pension input in excess of the annual allowance Lifetime allowance charge 55% of excess over lifetime allowance if taken as a lump sum. 25% of excess over lifetime allowance if taken in the form of income, which is subsequently taxed under PAYE. Unauthorised payment charge A 40% income tax charge will be levied on the recipient of the payment and the scheme would also be charged income tax normally at 15% of the unauthorised payment. A surcharge of 15% income tax is payable in addition where the unauthorised payment is more than 25% of the fund value. Minimum pension age The minimum pension age is 55. Increasing to 57 in 2028. For members with protected retirement ages under 50, the lifetime allowance is reduced by 2.5% for each year below the normal pension age except for some public service schemes such as Police and Armed Forces. No reduction for ill health early retirement. Triviality Small pension funds can be paid as one-off lump sums, 25% tax free and 75% taxable as income from age 55. Maximum value of triviality lump sum is 30,000. Flexible Access Drawdown (FAD) from 6 April 2015 Maximum tax free cash lump sum 25% of fund from age 55 Maximum income unlimited from age 55 Uncrystallised Fund Pension Lump Sum (UFPLS) 25% tax free, 75% taxable as income Maximum GAD limited for Capped Drawdown plans started before 5 April 2015 Page 11 v81.1
Auto-enrolment minimum contributions Dates Employer Employee Total Up to April 2018 1% 1% 2% 5 April 2018 to 6 April 2019 2% 3% 5% From 6 April 2019 3% 5% 8% The minimum earnings for auto-enrolment is the income tax threshold for that tax year. For 2018/19 10,000 13. Inheritance Tax 2018/19 2017/18 Nil rate band* 325,000 325,000 Residence nil rate band ** 125,000 100,000 Death rate (tax on excess over nil rate band) *** 40% 40% Lifetime transfers to and from certain trusts 20% 20% Overseas domiciled spouse/civil partner exemption 325,000 325,000 *Up to 100% of the unused proportion of a deceased spouse s/civil partner s Nil-Rate Band and Residence Nil Rate Band can be claimed on the surviving spouse s/civil partner s death. **Subject to 50% taper for estates above 2,000,000 *** Reduced to 36% for deaths on or after 6 April 2012 where at least 10% of the net estate is left to charity. Taper relief Reduced tax charge on gifts within 7 years of death Years between gift and death 0-3 3-4 4-5 5-6 6-7 Percentage of death charge 100% 80% 60% 40% 20% Main Exemptions Gifts to UK domiciled spouses/civil partners are 100% exempt Gifts to non-uk domiciled spouses/civil partners from UK domiciled spouses/civil partners are exempt up to 325,000 Individual annual allowance of 3,000 per tax year. Any unused allowance can be carried forward one tax year, however the allowance for that tax year must be used first before any unused allowance can be carried forward; Individuals can make unlimited small gifts of 250 per person; Normal expenditure out of income is exempt as long as it does not reduce the donor s standard of living; Gifts in consideration of marriage/civil partnership ( 5,000 by a parent, 2,500 by a party to the marriage/civil partnership or remoter relative and 1,000 by anyone else); Gifts to UK registered charities and political parties with at least one Member of Parliament are unlimited; Page 12 v81.1
Gifts for public benefit/national purposes may also be exempt; Gifts for the maintenance of a family (subject to conditions). Reliefs Business relief: 100% - available for interests in unincorporated businesses, sole traders and partnerships. Shareholdings of any size in unquoted and AIM companies. 50% - available for controlling shareholdings in fully listed companies. Land, buildings, plant and machinery used wholly or mainly in connection with a company controlled by the transferor or a partnership in which the transferor was a partner. Agricultural relief: 100% - available for owner occupied farms and farm tenancies. 50% - available for interest of landlords in let farmlands. The 50% relief is increased to 100% for land let under tenancies exceeding 12 months that started after 31 August 1995. The information provided is based on our understanding of UK law and HMRC practice at the date of production, which may be subject to immediate change. Wizard Learning are not responsible for any arrangements entered into on the basis of the information in this document. Page 13 v81.1