Budget November 2017 – Tax Rates & Allowances

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Budget November 2017 – Tax Rates & Allowances

2016/172017/182018/19
£££
Income tax rates – (non-dividend income)   
0% – starting rate for savings only note 1Up to 5,000Up to 5,000 Up to £5,000
20% basic rate tax11,001 – 43,00011,501 – 45,000 11,851 – 46,350
40% higher rate tax43,001 – 150,00045,001 to 150,000 46,351 – 150,000
45% additional rate taxAbove 150,000Above 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)20.720.7 20.7
Other children13.713.7 13.7
Guardian’s allowance16.5516.7 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 211,00011,500 11,850
Dividend allowance5,0005,000 2,000
Maximum Married couple’s allowance for those born before 6 April 1935 – note 38,3558,445 8,695
Married couple’s allowance – minimum amount – note 33,2203,260 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/aAllowance- 1,000 Allowance- 1,000
Income limit – note 1100,000100,000 100,000
Income limit for Married couple’s allowance- born before 6 April 193527,70028,000 28,900
Blind person’s allowance2,2902,320 2,390
Rent-a-room relief7,5007,500 7,500
Transferable tax allowance for married couples and civil partners – note 41,1001,150 1,185
Personal savings allowance for basic rate tax payers – note 51,0001,000 1,000
Personal savings allowance for higher rate tax payers – note 5500500 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)112113 116
Upper earnings limit, primary Class 1 (per week)827866 892
Apprentice upper  secondary threshold (AUST) for under 21s/ 25s827866 892
Primary threshold (per week)155157 162
Secondary threshold (per week)156157 162
Employment allowance (per year per employer)3,0003,000 3,000
Employee’s primary Class 1 rate between primary threshold and upper earnings limit12%12% 12%
Employee’s primary Class 1 rate above upper earnings limit2%2% 2%
Married woman’s reduced rate between primary threshold and upper earnings limit5.85%5.85% 5.85%
Married woman’s rate above upper earnings limit2.00%2.00% 2.00%
Employer’s secondary Class 1 rate above secondary threshold13.80%13.80% 13.80%
Class 2 rate (per week where profits are above small profits threshold)2.802.852.95
Class 2 small profits threshold (per year)5,9656,0256,205
Special Class 2 rate for share fishermen (per week)3.453.5 3.6
Special Class 2 rate for volunteer development workers5.65.65 5.80
Class 3 rate (per week)14.114.25 14.65
Class 4 lower profits limit8,0608,164 8,424
Class 4 upper profits limit43,00045,000 46,350
Class 4 rate between lower profits limit and upper profits limit9.00%9.00% 9.00%
Class 4 rate above upper profits limit2.00%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 140,00040,000 40,000
Lifetime allowance1,000,0001,000,000 1,030,000
Money purchase annual allowance – note 210,0004,000 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) – maximum1,000,0001,000,0002,000,000
Venture Capital Trust (VCT) – maximum200,000200,000200,000
Enterprise Management Incentive Scheme (EMI) – employee limit250,000250,000250,000
Seed Enterprise Investment Scheme (SEIS) – maximum100,000100,000100,000
Income tax relief on EIS schemes30%30%30%
Income tax relief on VCT schemes30%30%30%
Income tax relief on SEIS schemes50%50%50%
Individual Savings Account (ISA):  
ISA (NISA) annual limit15,24020,00020,000
Junior ISA investment annual limit4,0804,1284,260
Child value of Child Trust Fund annual limit4,0804,1284,260
LISA- annual limit (for ages between 18 to 40)n/a4,0004,000
Capital gains tax   
Rate
– basic rate tax payer10%10% 10%
– higher rate tax payer20%20% 20%
Gain on sale of residential  property
– basic rate tax payer18%18%18%
– higher rate tax payer28%28%28%
Annual exemptions – individuals (per year)11,10011,30011,700
Certain trusts for disabled persons (per year)11,10011,30011,700
Other trusts (per year)5,5505,6505,850
Entrepreneurs Relief lifetime limit10,000,00010,000,00010,000,000
Entrepreneurs Rate10%10%10%
Chattels exemption6,0006,0006,000
Inheritance tax   
Single persons nil rate band1 – 325,0001 – 325,0001 – 325,000
Single persons 40% bandover 325,000over 325,000over 325,000
Residence nil rate band (RNRB) – maximum  -note 2n/a100,000125,000
Reduced rate note 136%36%36%
IHT Rate (for chargeable lifetime transfers)20%20%20%
Married couples or civil partnerships allowance nil rate band650,000650,000650,000
Gifts to charitiesExemptExemptExempt
Small gifts to same person250250250
General gifts- annual exemption3,0003,0003,000
Wedding gifts from:
Parent5,0005,0005,000
Grandparent/party2,5002,5002,500
Other person1,0001,0001,000
Business Property Relief
Business or interest in a business and transfer if unquoted shareholdings100%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 17.50%7.50%7.50%
Trust income up to £1,000 – all other income20%20%20%
Trust income over £1,000 – dividend type income38.10%38.10%38.10%
Trust income over £1,000 – all other income45%45%45%
Interest in possession trusts:
Dividend type income7.50%7.50%7.50%
All other income20%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 participator32.50%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/km18%18%18%
Motor Cars- if CO2 > 130g/km8%8%8%
Small pool write off where WDV is £1,000 or less100%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 products100%100% 100%
Annual investment allowance100%100% 100%
1  AIA level set permanently from 1 January 2016 at £200,000 pa 
Research and Development Tax Credit Rates  
SME Rate230%230% 230%
Research and development SME payable credit14.5%14.5%14.5%
Research and development expenditure credit (RDEC) scheme11%11% 12%
Patent Box   
Patent box10%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 rate20%20%20%
Reduced rate5%5%5%
Zero rate0%0%0%
Flat rate of VAT on gross turnover (For Limited Cost Trader)16.5%16.5%16.5%
Normal scheme registration threshold83,00085,00085,000
Deregistration threshold81,00083,00083,000
Cash accounting scheme  -maximum to join1,350,0001,350,0001,350,000
Cash accounting scheme –  exit threshold1,600,0001,600,0001,600,000
Annual accounting scheme – maximum to join1,350,0001,350,0001,350,000
Annual accounting scheme – exit threshold1,600,0001,600,0001,600,000
Flat rate scheme – maximum allowed to join150,000150,000150,000
Flat rate scheme exit threshold230,000230,000230,000
Annual Tax on Enveloped Dwellings (ATED)   
More than £0.5m but not more than £1m3,5003,500 3,600
More than £1m but not more than £2m7,0007,050 7,250
More than £2m but not more than £5m23,35023,550 24,250
More than £5m but not more than £10m54,45054,950 56,550
More than £10m but not more than £20m109,050110,100 113,400
More than £20m218,200220,350 226,950

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