Income tax rates and bands | PRB Accountants LLP | Haywards Heath

Income tax rates and bands

England, Nothern Ireland & Wales

Tax bands and rates 2018/19 2017/18
Basic rate band £34,500 £33,500
Basic tax rate 20% 20%
Dividend ordinary tax rate 7.5% 7.5%
Savings starting rate band limit £5,000* £5,000*
Savings starting rate - savings income 0% 0%
Higher rate band £34,501 - £150,000 £33,501 - £150,000
Higher tax rate 40% 40%
Dividend upper tax rate 32.5% 32.5%
Additional rate band over £150,000 £150,000
Additional tax rate 45% 45%
Dividend additional tax rate 38.1% 38.1%
Personal allowance £11,850 £11,500
Trading allowance** £1,000 £1,000
Dividend allowance at 0% - all individuals £2,000 £5,000
Property allowance** £1,000 £1,000
Savings allowance*** £1,000 £1,000
Marriage allowance Transferable allowance £1,185 £1,150
Blind person's allowance £2,390 £2,320
Married couple's allowance (those born before 6 April 1935) Maximum amount £8,695 £8,445
Tax reduction at 10% £869.50 £844.50
Applies after UK residence in 7 or
more of the previous 9 tax years
£30,000 £30,000
Applies after UK residence in at least 12 of the previous 14 years £60,000  £60,000 

Enterprise investment scheme (EIS) up to

£1m**** £1m
Maximum amount for EIS carry back £50,000 £50,000
Income tax relief rate 30% 30%
Seed enterprise investment scheme (SEIS) £100,000 £100,000
Income tax relief  50%  50%
Venture capital trust (VCT) £200,000**** £200,000
Social investment relief £1m £1m
Income tax relief 30% 30%
VCT tax relief rate 30% 30%
Golden handshake maximum tax-free £30,000 £30,000
Rent-a-room (exempt on gross annual rent up to) £7,500 £7,500
Construction industry scheme - deduction rate    
Standard rate - registered 20% 20%
Higher rate - not registered 30% 30%
Child benefit charge - 1% of benefit per £100 of income between £50,000 and £60,000

* Savings income falling into the first £5,000 may be taxed at 0% for certain low income earners.

** When the gross income is £1,000 or less. May alternatively be deducted from gross income instead of the actual expenses.

*** £500 for higher rate and £nil for additional rate taxpayers.

**** Investment limit increases for investment in knowledge-intensive companies receiving investments under the EIS and VCTs rules. The annual limit for individuals investing in knowledge-intensive companies under the EIS will be increased to £2 million, provided that anything above £1 million is invested in knowledge-intensive companies. The annual EIS and VCT limit on the amount of
tax-advantaged investments a knowledge-intensive company may receive is increased to £10 million.

Scotland

2018/19 Band Rate
£11,850*-£13,850 Starter 19%
£13,851-£24,000 Basic 20%
£24,001-£44,430 Intermediate 21%
£44,431-£150,000** Higher 41%
Over £150,000 Top 46%

* Assumes individuals are in receipt of the personal allowance.

** Those earning more than £100,000 will see their personal allowance reduced by £1 for every £2 earned over £100,000.

2019 and beyond - England, Wales & Northern Ireland only

It is intended to increase the personal allowance to £12,500 and the higher rate threshold to £50,000, but no timetable for these increases has been announced.

Once these limits have been attained they will, in future, be index linked by reference to the consumer prices index (CPI).

From 6 April 2019, a Welsh rate of income tax is to be introduced. This tax will continue to be collected by HMRC.

Termination payments over £30,000 which are subject to income tax after April 2018 will also be subject to employers national insurance contributions.

Income tax will only be applied on the equivalent of an employee’s basic pay if the employee has not worked the notice period.