Income Tax Rates and Allowances
Income Tax Rates and Allowances (Table A)
| Main allowances | 2018/19 | 2017/18 |
|---|---|---|
| Personal Allowance (PA)*† | £11,850 | £11,500 |
| Blind Person's Allowance | 2,390 | 2,320 |
| Rent a room relief § | 7,500 | 7,500 |
| Trading income § | 1,000 | 1,000 |
| Property income § | 1,000 | 1,000 |
*PA will be withdrawn at £1 for every £2 by which ‘adjusted income’ exceeds £100,000. There will therefore be no allowance given if adjusted income is £123,700 or more (2017/18: £123,000).
†10% of the PA (2018/19: £1,185; 2017/18: £1,150) can be transferred to a spouse or civil partner who is no more than a basic rate taxpayer, where both spouses were born after 5 April 1935.
§ If gross income exceeds it, the limit may be deducted instead of actual expenses.
| Rate Bands | 2018/19 | 2017/18 |
|---|---|---|
| Basic Rate Band (BRB) | £34,500 | £33,500 |
| Higher Rate Band (HRB) | 34,501-150,000 | 33,501-150,000 |
| Additional rate | over 150,000 | over 150,000 |
| Personal Savings Allowance (PSA) | ||
| – Basic rate taxpayer | 1,000 | 1,000 |
| – Higher rate taxpayer | 500 | 500 |
| Dividend Allowance (DA) | 2,000 | 5,000 |
BRB and additional rate threshold are increased by personal pension contributions (up to permitted limit) and Gift Aid donations.
Scottish taxpayers
The 2018/19 tax rates and bands for Scottish taxpayers have not been announced. For 2017/18, the basic rate band is £31,500.
| Tax Rates | 2018/19 and 2017/18 | ||
|---|---|---|---|
| Rates differ for General, Savings and Dividend income within each band: | |||
| G | S | D | |
| Basic | 20% | 20% | 7.5% |
| Higher | 40% | 40% | 32.5% |
| Additional | 45% | 45% | 38.1% |
General income (salary, pensions, business profits, rent) usually uses personal allowance, basic rate and higher rate bands before savings income (interest). To the extent that savings income falls in the first £5,000 of the basic rate band, it is taxed at nil rather than 20%.
The PSA taxes interest at nil, where it would otherwise be taxable at 20% or 40%.
Dividends are normally taxed as the ‘top slice’ of income. The DA taxes the first £2,000 (2017/18: £5,000) of dividend income at nil, rather than the rate that would otherwise apply.
High Income Child Benefit Charge (HICBC)
1% of child benefit for each £100 of adjusted net income between £50,000 and £60,000.
| Remittance basis charge | 2018/19 | 2017/18 |
|---|---|---|
| For non-UK domiciled individuals who have been UK resident in at least: | ||
| 7 of the preceding 9 tax years | £30,000 | £30,000 |
| 12 of the preceding 14 tax years | 60,000 | 60,000 |
| 15 of the preceding 20 tax years | Deemed to be UK domiciled for tax purposes | |
Registered Pensions (Table B)
| 2018/19 | 2017/18 | |
|---|---|---|
| Lifetime Allowance (LA) | £1,030,000 | £1,000,000 |
| Annual Allowance (AA) | 40,000 | 40,000 |
Annual relievable pension inputs are the higher of earnings (capped at AA) or £3,600.
The AA is usually reduced by £1 for every £2 by which relevant income exceeds £150,000, down to a minimum AA of £10,000. The AA can be reduced to £4,000, where certain pension drawings have been made.
Car and Fuel Benefits (Table C)
Cars
Taxable benefit: Chargeable value multiplied by chargeable percentage.
Chargeable value: Initial list price of car (including most accessories), reduced by any capital contribution (maximum £5,000) by employee when the car is first made available.
Chargeable percentage:
| CO2 emissions (g/km) | Petrol | Diesel |
|---|---|---|
| 0-50 | 13% | 17% |
| 51-75 | 16% | 20% |
| 76-94 | 19% | 23% |
| Above 94 | Add 1% for every 5g/km | |
| Above 179 (petrol)/ 159 (diesel) | 37% maximum | |
Car Fuel
Where employer provides fuel for private motoring in an employer-owned car, CO2-based percentage from above table multiplied by £23,400 (2017/18 £22,600).
Employee contributions for fuel do not reduce taxable figure unless all private fuel is paid for by the employee (in which case there is no benefit charge).