Tax and NIC rates

Income tax allowance

Allowances £ 2016/17 2017/18 2018/19
Personal Allowances*      
those born after 5 April 1948 11,000 11,500 11,850
those born between 6 April 1938 and 5 April 1948 11,000 11,500 11,850
those born before 6 April 1938 11,000 11,500 11,850
Transferable tax allowance:      
for married couples and civil partners 1,100 1,150 1,190
Married couple's allowance:      
for those born before 6 April 1935, maximum amount 8,355 8,445 8,695
for those born before 6 April 1935, minimum amount 3,220 3,260 3,360
Blind person's allowance 2,290 2,320 2,390
Income limit for personal allowance 100,000 100,000 100,000
Income limit for married couple’s allowance** 27,700 28,000 28,900
Dividend Allowance*** 5,000 5,000 2,000
Personal Savings Allowance****      
Basic Rate Taxpayers 1,000 1,000 1,000
Higher Rate Taxpayers 500 500 500



* Before 2016/17 an individual’s personal allowance depended on their date of birth and their income in the tax year. From 2016/17 onwards, all individuals are entitled to the same personal allowance, regardless of their date of birth; this is subject to the income limit of £100,000.

** The married couple’s allowance is reduced, where the taxpayer’s income in the tax year is above the income limit, by £1 for every £2 above the limit until the level of the minimum married couple’s allowance is reached.

*** From 2016/17, any individual who receives dividend income is entitled to a Dividend Allowance. This is a nil rate band of tax, which means an individual pays no income tax on their dividend income up to the amount of the allowance. It does not reduce the amount of taxable income.

**** From 2016/17, basic rate and higher rate taxpayers (but not additional rate taxpayers) who receive savings income are entitled to a Personal Savings Allowance. This is a nil rate band of tax, which means that basic rate and higher rate taxpayers pay no income tax on £1,000 or £500 of savings income respectively. The Personal Savings Allowance does not reduce the amount of taxable income.

Income tax – taxable bands*

2016/17 Band 2017/18 Band 2018/19 Band
Starting rate for savings
0%
Up to £5,000 Starting rate for savings
0%
Up to £5,000 Starting rate for savings 
0%
Up to £5,000
Basic rate
20%
Up to
£32,000

Basic rate
20%

Up to £33,500 Basic rate 
20%
Up to £34,500
Higher rate
40%
£32,001 to £150,000 Higher rate
40%
£33,501 to £150,000 Higher rate
40%
£34,501 to £150,000
Additional rate
45%
Over £150,000 Additional rate
45%
Over £150,000 Additional rate
45%
Over £150,000

 

* From April 2016, if you live in Scotland and are a Scottish taxpayer, Scottish rates and bands apply to your non-savings, non-dividend income. See our section on Scottish income tax for more information, including the rates and bands.

Dividends*

2016/17 Tax rate 2017/18 Tax rate 2018/19 Tax rate
Up to
£32,000
7.5% Up to £33,500 7.5% Up to £34,500 7.5%
£32,001 – £150,000 32.5% £33,501 – £150,000 32.5% £34,501 – £150,000 32.5%
Over £150,000 38.1% Over £150,000 38.1% Over £150,000 38.1%

 

* From April 2016 the dividend tax credit (10%) is abolished and replaced with a tax-free Dividend Allowance. In addition, the dividend tax rates have changed.

National Insurance contributions (NIC)

Class 1 primary NIC (employee – EE)

£ per week (unless stated) 2016/17 2017/18 2018/19
Lower earnings limit 112 113 116
Primary threshold 155 157 162
Upper accrual point n/a n/a n/a
Upper earnings limit 827 866 892
EE primary Class 1 rate between primary threshold and upper earnings limit 12% 12% 12%
EE primary Class 1 rate above upper earnings limit 2% 2% 2%
EE contracted-out rebate – salary n/a n/a n/a
Married women's reduced rate between primary threshold and upper earnings limit 5.85% 5.85% 5.85%
Married women's rate above upper earnings limit 2% 2% 2%



Class 1 secondary NIC (employers – ER)

£ per week (unless stated) 2016/17 2017/18 2018/19
Secondary threshold 156 157 162
ER secondary Class 1 rate above secondary threshold 13.8% 13.8% 13.8%
ER contracted-our rebate – salary related schemes n/a n/a n/a



Class 2 NIC (self-employed)

£ per week (unless stated) 2016/17 2017/18 2018/19
Class 2 rate 2.80 2.85 2.95
Class 2 small earnings exception/small profits (per year) 5,965 6,025 6,205
Special Class 2 rate for share fishermen 3.45 3.50 3.60
Special Class 2 rate for volunteer development workers 5.60 5.65 5.80



Class 3 NIC (voluntary)

£ per week 2016/17 2017/18 2018/19
Class 3 rate 14.10 14.25 14.65



Class 4 NIC (self-employed)

£ per year 2016/17 2017/18 2018/19
Class 4 lower profits limit 8,060 8,164 8,424
Class 4 upper profits limit 43,000 45,000 46,350
Class 4 rate between lower profits limit and upper profits limit 9% 9% 9%
Class 4 rate above upper profits limit 2% 2% 2%


Capital gains tax

  2016/17 2017/18 2018/19
Standard rate 10%/18%* 10%/18% 10%/18%
Rate for higher and additional taxpayers 20%/28%* 20%/28% 20%/28%
Annual exemption £11,100 £11,300 £11,700
Entrepreneurs' Relief rate 10% 10% 10%
Entrepreneurs' Relief lifetime limit £10m £10m £10m

 

* CGT rates of 10% and 20% introduced in Finance Bill 2016 for disposals on or after 6 April 2016 do not apply to transactions involving residential property or carried interest. CGT rates for these transactions remain at 18% and 28%.

Inheritance tax

Chargeable lifetime transfers (after exemptions) 2016/17 2017/18 2018/19
Nil rate band – 0% Up to £325,000 Up to £325,000 Up to £325,000
20% Over £325,000 Over £325,000 Over £325,000
On death (net estate)      
Nil band rate – 0% Up to £325,000 Up to £325,000 Up to £325,000
Residence nil rate band* – 0% n/a Up to £100,000 Up to £125,000
40% Over £325,000 Over £325,000 or £425,000 Over £325,000 or £450,000


* From April 2017, there is a residence nil rate band. This will be available on the death of an individual, if they pass on a property, which has been their residence at some point, to a direct descendant.

** There is a reduced rate of 36% for estates that leave 10% or more to charity.

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