Budget November 2017 – Tax Rates & Allowances

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Budget November 2017 – Tax Rates & Allowances

2016/17 2017/18 2018/19
£ £ £
Income tax rates – (non-dividend income)      
0% – starting rate for savings only note 1 Up to 5,000 Up to 5,000  Up to £5,000
20% basic rate tax 11,001 – 43,000 11,501 – 45,000  11,851 – 46,350
40% higher rate tax 43,001 – 150,000 45,001 to 150,000  46,351 – 150,000
45% additional rate tax Above 150,000 Above 150,000  Above 150,000
1  If an individual’s taxable non-savings income exceeds the starting rate limit, then the starting rate for savings will not be available for savings income
     
Income tax rates – (dividend income new rules from 6/4/2016)    
Dividend allowance £5,000 £5,000 £2,000
Dividend ordinary rate (for dividends within basic rate band) 7.50% 7.50% 7.50%
Dividend upper rate (for dividends within higher rate band) 32.50% 32.50% 32.50%
Dividend additional rate (for dividends above higher rate band) 38.10% 38.10% 38.10%
       
Child benefit/Guardian’s allowance rates      
Higher rate (eldest child only) (per week) 20.7 20.7  20.7
Other children 13.7 13.7  13.7
Guardian’s allowance 16.55 16.7  17.2
An income tax charge will apply to taxpayers with income exceeding £50,000 in a tax year, when child benefit is also received by them or their partner. The charge will reduce the financial benefit of receiving child benefit for those with income between £50,000 and £60,000 and remove it completely for taxpayers with income above £60,000.
Personal allowances      
Personal allowance – note 2 11,000 11,500  11,850
Dividend allowance 5,000 5,000  2,000
Maximum Married couple’s allowance for those born before 6 April 1935 – note 3 8,355 8,445  8,695
Married couple’s allowance – minimum amount – note 3 3,220 3,260  3,360
Micro entrepreneurs allowance:
Individuals making property or trading incomes below the level of the allowance would no longer need to declare or pay tax, while those who exceeded the level from their can benefit by simply deducting the allowance instead of calculating their exact expenses. n/a Allowance- 1,000  Allowance- 1,000
Income limit – note 1 100,000 100,000  100,000
Income limit for Married couple’s allowance- born before 6 April 1935 27,700 28,000  28,900
Blind person’s allowance 2,290 2,320  2,390
Rent-a-room relief 7,500 7,500  7,500
Transferable tax allowance for married couples and civil partners – note 4 1,100 1,150  1,185
Personal savings allowance for basic rate tax payers – note 5 1,000 1,000  1,000
Personal savings allowance for higher rate tax payers – note 5 500 500  500
1  This allowance is subject to the £100,000 income limit which applies regardless of the individual’s date of birth. The individual’s personal allowance is reduced where their income is above this limit. The allowance is reduced by £1 for every £2 above the limit
2  From 2016-17 onwards, all individuals will be entitled to the same personal allowance, regardless of the individuals’ date of birth. This allowance is subject to the £100,000 income limit which applies regardless of the individual’s date of birth.
3. The individual’s married couple’s allowance is reduced by £1 for every £2 above this limit.
This transferable allowance is available to married couples and civil partners who are not in receipt of married couple’s allowance. A spouse or civil partner who is not liable to income tax; or not liable at the higher or additional rates, can transfer this amount of their unused personal allowance to their spouse or civil partner. The recipient must not be liable to income tax at the higher or additional rates.

The government will now allow claims in case where a partner has died before the claim was made. These claims will be able to be backdated up to 4 years.

5  Basic rate tax will no longer be deducted from personal savings interest.
National insurance      
Lower earnings limit, primary Class 1 (per week) 112 113  116
Upper earnings limit, primary Class 1 (per week) 827 866  892
Apprentice upper  secondary threshold (AUST) for under 21s/ 25s 827 866  892
Primary threshold (per week) 155 157  162
Secondary threshold (per week) 156 157  162
Employment allowance (per year per employer) 3,000 3,000  3,000
Employee’s primary Class 1 rate between primary threshold and upper earnings limit 12% 12%  12%
Employee’s primary Class 1 rate above upper earnings limit 2% 2%  2%
Married woman’s reduced rate between primary threshold and upper earnings limit 5.85% 5.85%  5.85%
Married woman’s rate above upper earnings limit 2.00% 2.00%  2.00%
Employer’s secondary Class 1 rate above secondary threshold 13.80% 13.80%  13.80%
Class 2 rate (per week where profits are above small profits threshold) 2.80 2.85 2.95
Class 2 small profits threshold (per year) 5,965 6,025 6,205
Special Class 2 rate for share fishermen (per week) 3.45 3.5  3.6
Special Class 2 rate for volunteer development workers 5.6 5.65  5.80
Class 3 rate (per week) 14.1 14.25  14.65
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 9.00% 9.00%  9.00%
Class 4 rate above upper profits limit 2.00% 2.00%  2.00%
The government had previously announced its intention to abolish “class 2” national insurance contributions (NICs) for the self-employed in April 2018, but has now said it will delay the move for a year.
Pensions      
Annual allowance  note 1 40,000 40,000  40,000
Lifetime allowance 1,000,000 1,000,000  1,030,000
Money purchase annual allowance – note 2 10,000 4,000  4,000
1  The Finance Bill 2015 provided that from tax year 2016/17 the annual allowance for those earning above £150,000 is to be reduced on a tapering basis so that it reduces to £10,000 for those earning above £210,000. For every £2 of income above £150,000, an individual’s annual allowance will reduce by £1.
2 This means that once a person has accessed pension savings flexibly, if they wish to make any further contributions to a defined contribution pension, tax-relieved contributions are restricted to a special money purchase annual allowance (MPAA).
Relief’s and incentives      
Enterprise Investment Scheme (EIS) – maximum 1,000,000 1,000,000 2,000,000
Venture Capital Trust (VCT) – maximum 200,000 200,000 200,000
Enterprise Management Incentive Scheme (EMI) – employee limit 250,000 250,000 250,000
Seed Enterprise Investment Scheme (SEIS) – maximum 100,000 100,000 100,000
Income tax relief on EIS schemes 30% 30% 30%
Income tax relief on VCT schemes 30% 30% 30%
Income tax relief on SEIS schemes 50% 50% 50%
Individual Savings Account (ISA):    
ISA (NISA) annual limit 15,240 20,000 20,000
Junior ISA investment annual limit 4,080 4,128 4,260
Child value of Child Trust Fund annual limit 4,080 4,128 4,260
LISA- annual limit (for ages between 18 to 40) n/a 4,000 4,000
Capital gains tax      
Rate
– basic rate tax payer 10% 10%  10%
– higher rate tax payer 20% 20%  20%
Gain on sale of residential  property
– basic rate tax payer 18% 18% 18%
– higher rate tax payer 28% 28% 28%
Annual exemptions – individuals (per year) 11,100 11,300 11,700
Certain trusts for disabled persons (per year) 11,100 11,300 11,700
Other trusts (per year) 5,550 5,650 5,850
Entrepreneurs Relief lifetime limit 10,000,000 10,000,000 10,000,000
Entrepreneurs Rate 10% 10% 10%
Chattels exemption 6,000 6,000 6,000
Inheritance tax      
Single persons nil rate band 1 – 325,000 1 – 325,000 1 – 325,000
Single persons 40% band over 325,000 over 325,000 over 325,000
Residence nil rate band (RNRB) – maximum  -note 2 n/a 100,000 125,000
Reduced rate note 1 36% 36% 36%
IHT Rate (for chargeable lifetime transfers) 20% 20% 20%
Married couples or civil partnerships allowance nil rate band 650,000 650,000 650,000
Gifts to charities Exempt Exempt Exempt
Small gifts to same person 250 250 250
General gifts- annual exemption 3,000 3,000 3,000
Wedding gifts from:
Parent 5,000 5,000 5,000
Grandparent/party 2,500 2,500 2,500
Other person 1,000 1,000 1,000
Business Property Relief
Business or interest in a business and transfer if unquoted shareholdings 100% 100%  100%
1  The estate can pay Inheritance Tax at a reduced rate of 36% on some assets if you leave 10% or more of the ‘net value’ to charity in your will.
2  The RNRB applies in addition to the existing nil rate band (NRB) or threshold (currently £325,000) if the individual and estate meet the qualifying conditions.
Taxation of trusts      
Accumulation or discretionary trusts:
Trust income up to £1,000 – dividend type income- note 1 7.50% 7.50% 7.50%
Trust income up to £1,000 – all other income 20% 20% 20%
Trust income over £1,000 – dividend type income 38.10% 38.10% 38.10%
Trust income over £1,000 – all other income 45% 45% 45%
Interest in possession trusts:
Dividend type income 7.50% 7.50% 7.50%
All other income 20% 20% 20%
Corporation tax      
All profits and gains (excluding determination agreements and diverted profits) 20% 19%  19%
S455 tax on all loans made by close companies to participator 32.50% 32.50%  32.50%
Capital Allowances      
Main writing down allowance (reducing balance) 18% 18% 18%
Special rate writing down allowance (reducing balance) 8% 8% 8%
Motor Cars- if CO2 > 75g/km but do not exceed 130g/km 18% 18% 18%
Motor Cars- if CO2 > 130g/km 8% 8% 8%
Small pool write off where WDV is £1,000 or less 100% 100% 100%
 CO2 emissions are 75g/km or less (or car is electric) 100% 100% 100%
First year allowances for certain energy-saving/water efficient products 100% 100%  100%
Annual investment allowance 100% 100%  100%
1  AIA level set permanently from 1 January 2016 at £200,000 pa  
Research and Development Tax Credit Rates    
SME Rate 230% 230%  230%
Research and development SME payable credit 14.5% 14.5% 14.5%
Research and development expenditure credit (RDEC) scheme 11% 11%  12%
Patent Box      
Patent box 10% 10%  10%
The Patent box regime  was phased in from April 2013 with companies able to claim the benefit of
60% for 2013/14, 70% for 2014/15, 80% for 2015/16, 90% for 2016/17 and 100% from 2017/18 onwards
VAT      
Standard rate 20% 20% 20%
Reduced rate 5% 5% 5%
Zero rate 0% 0% 0%
Flat rate of VAT on gross turnover (For Limited Cost Trader) 16.5% 16.5% 16.5%
Normal scheme registration threshold 83,000 85,000 85,000
Deregistration threshold 81,000 83,000 83,000
Cash accounting scheme  -maximum to join 1,350,000 1,350,000 1,350,000
Cash accounting scheme –  exit threshold 1,600,000 1,600,000 1,600,000
Annual accounting scheme – maximum to join 1,350,000 1,350,000 1,350,000
Annual accounting scheme – exit threshold 1,600,000 1,600,000 1,600,000
Flat rate scheme – maximum allowed to join 150,000 150,000 150,000
Flat rate scheme exit threshold 230,000 230,000 230,000
Annual Tax on Enveloped Dwellings (ATED)      
More than £0.5m but not more than £1m 3,500 3,500  3,600
More than £1m but not more than £2m 7,000 7,050  7,250
More than £2m but not more than £5m 23,350 23,550  24,250
More than £5m but not more than £10m 54,450 54,950  56,550
More than £10m but not more than £20m 109,050 110,100  113,400
More than £20m 218,200 220,350  226,950

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