Tax Rates & Thresholds 2017/18

Tax bands for Income Tax:

 

Basic Rate

£0 - £33,500

Higher Rate

£33,500 - £150,000

Additional Rate

Over £150,000

 

Personal Allowance

£11,500

 

Your first £11,500 of income will fall under the personal allowance and is tax free. If you have income of £45,000 then £33,500 is taxed at the basic rate and the remainder falls in the personal allowance meaning none of it falls in the higher rate.

Your personal allowance goes down by £1 for every £2 that your income is above £100,000. This means your allowance is zero if your income is £123,000 or above.

 

 

Income tax rates:

 

Basic Rate

20%

Higher Rate

40%

Additional Rate

45%

 

 

Dividend tax rates:

 

Basic Rate

7.50%

Higher Rate

32.50%

Additional Rate

38.10%

 

The first £5,000 dividends are taxed at 0% (dividend allowance).

 

 

Self-Employment rates:

 

Class of NICs

Threshold

Rate

Class 2 NICs

£6,025 profit

£2.85 / year

Class 4 NICs

£8,164 profit

9% on profits between £8,164 - £45,000

2% on profits over £45,000

 

 

National Living Wage & Minimum Wage:

 

25 and over

21 to 24

18 to 20

Under 18

Apprentice

£7.50

£7.05

£5.60

£4.05

£3.50

 

Entitlement to apprentice rate:

  • Aged under 19
  • Aged 19 or over and in first year of apprenticeship 

 

Apprentices entitled to minimum wage:

  • Aged 19 or over
  • Have completed first year of apprenticeship

 

 

Company Taxes:

 

Corporation Tax Rate

19.00%

 

VAT Registration Threshold

£85,000

VAT Deregistration Threshold

£83,000

 

Flat Rate Scheme Registration Threshold

£150,000

 

If your income exceeds £230,000 in a year then you will need to deregister from the flat rate scheme.

 

 

Directors Loan

Liability

Not repaid within 9 months of year-end

32.50% - S455 tax

Exceeds £10,000 at any point in year

Benefit in Kind – included on your P11D

 

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