2019/20 tax rates
|Personal Allowance (PA)*||£12,500||£11,850|
|Blind Person’s Allowance||2,450||2,390|
|Rent a room relief**||7,500||7,500|
- * PA will be withdrawn at £1 for every £2 by which ‘adjusted income’ exceeds £100,000. There will therefore be no allowance given if adjusted income is £125,000 (2018/19: £123,700).
- † The part of the PA that is transferable to a spouse or civil partner who is not a higher or top rate taxpayer.
- ** If gross income exceeds it, the limit may be deducted instead of actual expenses.
|Basic rate band (BRB)||£37,500||£34,500|
|Higher Rate Band (HRB)||37,501 – 150,000||34,501 – 150,000|
|Additional rate||over 150,000||over 150,000|
|Personal Savings Allowance (PSA)|
|– Basic rate taxpayer||1,000||1,000|
|– Higher rate taxpayer||500||500|
|Dividend Allowance (DA)||2,000||2,000|
- BRB and additional rate threshold are increased by personal pension contributions (up to permitted limit) and Gift Aid donations.
|Tax rates||2019/20 and 2018/19|
|Rates differ for General, Savings and Dividend income||G||S||D|
- General income (salary, pensions, business profits, rent) usually uses personal allowance, basic rate and higher rate bands before savings income (interest). Scottish taxpayers are taxed at different rates on general income (see below).
- To the extent that savings income falls in the first £5,000 of the basic rate band, it is taxed at nil rather than 20%.
- The PSA taxes interest at nil, where it would otherwise be taxable at 20% or 40%.
- Dividends are normally taxed as the ‘top slice’ of income. The DA taxes the first £2,000 of dividend income at nil, rather than the rate that would otherwise apply.
|Income tax – Scotland||2019/20||2018/19|
|Basic Rate||20%||2,050 – 12,444||2,001 – 12,150|
|Intermediate Rate||21%||12,445 – 30,930||12,151 – 31,580|
|Higher Rate||41%||30,931 – 150,000||31,581 – 150,000|
|Top Rate||46%||over 150,000||over 150,000|
- The Scottish rates and bands do not apply for savings and dividend income, which are taxed at normal UK rates.
High Income Child Benefit Charge (HICBC)
1% of child benefit for each £100 of adjusted net income between £50,000 and £60,000.
|Remittance basis charge||2019/20||2018/19|
|For non-UK domiciled individuals who have been
UK resident in at least:
|7 of the preceding 9 tax years||£30,000||£30,000|
|12 of the preceding 14 tax years||60,000||60,000|
|15 of the preceding 20 tax years||Deemed to be UK domiciled|
|Lifetime allowance (LA)||£1,055,000||£1,030,000|
|Annual allowance (AA)*||40,000||40,000|
- Annual relievable pension inputs are the higher of earnings (capped at AA) or £3,600.
- *Usually tapered (down to a minimum of £10,000) when adjusted income exceeds £150,00.
|State pension (per week)||2019/20||2018/19|
|Old state pension – Single person||£129.20||£125.95|
|Old state pension – Married couple||206.65||201.45|
|New state pension†||168.60||164.35|
- †applies to those reaching state retirement age after 5 April 2016.
Annual investment limits
|Individual Savings Account (ISA)|
|– Overall limit||£20,000||£20,000|
|– Lifetime ISA||4,000||4,000|
|EIS* – 30% relief||2,000,000||2,000,000|
|EIS eligible for CGT deferral relief||Unlimited||Unlimited|
|Seed EIS (SEIS) – 50% relief||100,000||100,000|
|SEIS – 50% exemption for reinvested gains||100,000||100,000|
|Venture Capital Trust (VCT) – 30% relief||200,000||200,000|
*Amount over £1m must be invested in ‘knowledge-intensive’ companies.
National Insurance Contributions
Class 1 (Employees)
|Main NIC rate||12.0%||13.8%|
|No NIC on first||£166pw||£166pw|
|Main rate* charged up to||£962pw||no limit|
|2% rate on earnings above||£962pw||N/A|
|Employment allowance per business**||N/A||£3,000|
*Nil rate of employer NIC for employees under the age of 21 and apprentices under 25, up to £962pw.
**Some businesses do not qualify, including certain sole director companies.
Employer contributions (at 13.8%) are also due on most taxable benefits (Class 1A) and on tax paid on an employee’s behalf under a PAYE settlement agreement (Class 1B).
Class 2 (Self-employed)
|Flat rate per week||£3|
|Small profits threshold||£6,365|
Class 3 (Voluntary)
|Flat rate per week||£15|
Class 4 (Self-employed)
|On profits £8,632 – £50,000||9.0%|
|On profits over £50,000||2.0%|
Taxable benefit: Chargeable value multiplied by chargeable %.
Initial list price of car (including most accessories), reduced by any capital contribution (maximum £5,000) by employee when the car is first made available.
|CO2 emissions g/km*||Petrol||Diesel|
|Above 94||Add 1% for every 5g/km|
|Above 164 (petrol)/ 144 (diesel)||37% maximum|
*The percentages for petrol cars apply to diesel cars that meet the RDE2 standard.
Chargeable value of £3,430 (2018/19 £3,350) if private use is more than home-to-work. Electric vans £2,058 (2018/19 £1,340).
Employer provides fuel for private motoring in an employer-owned:
- Car: CO2-based percentage from above table multiplied by £24,100 (2018/19 £23,400).
- Van: £655 (2018/19 £633).
Employee contributions do not reduce taxable figure unless all private fuel is paid for by the employee (in which case there is no benefit charge).
Tax-free mileage allowances
|Employee’s own transport||per business mile|
|Cars first 10,000 miles||45p|
|Cars over 10,000 miles||25p|
Capital gains tax
|Individual (to basic rate limit)*||10%||10%|
|Individual (above basic rate limit)*||20%||20%|
|Entrepreneurs’ Relief (ER)**||10%||10%|
|Investors’ Relief (IR)***||10%||N/A|
*Individuals are taxed at 18%/28% on gains on residential property and receipts of carried interest. Trusts and estates are taxed at 28% in these circumstances.
**ER is available for lifetime gains of up to £10m. Qualifying disposals include a trading business and shares in a trading company (from a minimum 5% holding) by an officer/employee. Various conditions apply.
***Shares in an unquoted trading company may qualify for IR on lifetime gains up to £10m, if acquired by someone who is not a paid officer or employee of the company and disposed of after 5.4.19. Various conditions apply.
|Corporation Tax rate||19%||19%|
|Research and development relief|
|SME enhanced expenditure
|Large company R&D Expenditure
Credit (RDEC) scheme**
*Additional deduction for qualifying R&D
**Taxable expenditure credit for qualifying R&D
SMEs that make losses can surrender the deduction to HMRC in exchange for a payment of 14.5% of the loss.
Main capital allowances
|Plant and machinery allowances||Rate|
|Annual Investment Allowance (AIA)|
|– expenditure 1.1.19 – 31.12.20||£1,000,000||100%|
|– expenditure pre 1.1.19||200,000||100%|
|Writing down allowance: general pool (reducing balance)||18%|
|Writing down allowance: special rate pool (reducing balance)*||6%|
|Motor cars purchased|
|1.4.15 to 31.3.18
|New cars only||up to 50||up to 75||100%|
|In general pool||up to 110||up to 130||18% pa|
|In special rate pool*||above 110||above 130||6% pa|
*8% pre 1.4.19 (companies) and pre 6.4.19 (businesses subject to income tax).
|Structures and buildings allowance|
|Expenditure from 29.10.18 (straight line basis)||2%|
Annual Tax on Enveloped Dwellings (ATED)
ATED applies to ‘high value’ residential properties owned via a corporate structure, unless the property is used for a qualifying purpose. The tax applies to properties valued at more than £500,000.
|Property value||Annual charge to|
|£0.5m – £1m||£3,650||£3,600|
|£1m – £2m||7,400||7,250|
|£2m – £5m||24,800||24,250|
|£5m – £10m||57,900||56,550|
|£10m – £20m||116,100||113,400|
Stamp Duty Land Tax (SDLT), Land and Buildings Transaction Tax (LBTT) and Land Transaction Tax (LTT)
|Residential property (1st property only)|
|SDLT – England & NI
|Rate||LBTT – Scotland
|Rate||LTT – Wales
|Up to 125||Nil||Up to 145||Nil||Up to 180||Nil|
|125 – 250||2%||145 – 250||2%||180 – 250||3.5%|
|250 – 925||5%||250– 325||5%||250 – 400||5.0%|
|925 – 1,500||10%||325 – 750||10%||400 – 750||7.5%|
|Over 1,500||12%||Over 750||12%||750 – 1,500||10.0%|
A supplement of 3% of the total purchase price applies for all three taxes where an additional residential property is purchased for more than £40,000 (unless replacing a main residence). It is also payable by all corporate purchasers. The rate is 3% (LBTT: 4%) of the total purchase price.
- First-time buyers purchasing a property of up to £500,000 pay a nil rate on the first £300,000 of purchase price.
- A rate of 15% may apply to the total purchase price, where the property is valued above £500,000 and purchased by a ‘non-natural person’ (e.g. a company).
- For LBTT, first-time buyer relief increases the nil rate band to £175,000.
|Non-residential or mixed use property|
|SDLT – England & NI
|Rate||LBTT – Scotland
|Rate||LTT – Wales
|Up to 150||Nil||Up to 150||Nil||Up to 150||Nil|
|150 – 250||2%||150 – 250||1%||150 – 250||1%|
|Over 250||5%||Over 250||5%||250 – 1,000||5%|
Value Added Tax
|Standard rate (1/6 of VAT-inclusive price)||20%|
|Registration level from 1.4.2017||£85,000 per annum|
|Deregistration level from 1.4.2017||83,000 per annum|
From 1.4.2019 most businesses above the registration threshold must comply with the Making Tax Digital requirements.
Flat Rate Scheme (FRS)
|Annual taxable turnover to enter scheme||Up to £150,000|
|Must leave scheme if annual taxable turnover||Exceeds £230,000|
If using FRS, the VAT paid by the business is a fixed percentage (based on business category) of “FRS turnover” rather than the net of output tax over input tax. Input tax is usually not recoverable.
Cash accounting and Annual accounting schemes
|Annual taxable turnover to enter scheme||Up to £1.35m|
|Must leave scheme if annual taxable turnover||Exceeds £1.60m|
Option to tax property
Notify HMRC within 30 days.
|Nil rate band (NRB)*||£325,000||£325,000|
|NRB Residential enhancement (RNRB)†*||150,000||125,000|
|Rate of tax above nil rate band**||40%||40%|
|Lifetime transfers to most trusts||20%||20%|
†RNRB is available for transfers of a main residence to direct descendants. It tapers away at the rate of £1 for every £2 of estate value above £2m.
*Up to 100% of the proportion of a deceased spouse’s/civil partner’s unused NRB and RNRB band may be claimed to increment the current NRB and RNRB when the survivor dies.
**Rate reduced to 36% if at least 10% of the relevant estate is left to charity. Unlimited exemption for transfers between spouses/civil partners, except if UK domiciled transferor and foreign domiciled transferee, where maximum exemption £325,000.
100% Business Property Relief (BPR) for all shareholdings in qualifying unquoted trading companies, qualifying unincorporated trading businesses and certain farmland/buildings.
Reduced tax charge on gifts within 7 years before death
|Years before death||0-3||3-4||4-5||5-6||6-7|
|% of full death tax charge payable||100||80||60||40||20|
Annual exemptions for lifetime gifts include £3,000 per donor and £250 per recipient.
Key dates and deadlines
|1st payment on account||31 January||2020||2019|
|2nd payment on account||31 July||2020||2019|
|Balancing payment||31 January||2021||2020|
|Capital Gains Tax*||31 January||2021||2020|
*Non-residents with gains on UK residential property must pay CGT within 30 days of disposal unless already filing a self assessment tax return.
|Other payment dates|
|Class 1A NIC||19 July||2020||2019|
|Class 1B NIC||19 October||2020||2019|
Corporation tax is due 9 months and 1 day from the end of the accounting period, unless a ‘large’ company paying by quarterly instalments.
|2018/19 Filing deadlines|
|Issue P60s to employees||31 May 2019|
|P11D, P11D(b)||6 July 2019|
|Self assessment tax return (SATR) paper version||31 October 2019|
|Online SATR if outstanding tax
to be included in 2020/21 PAYE code
|30 December 2019|
|Online SATR||31 January 2020|
|National Minimum Wage
Rates per hour
|From 1.04.19||From 1.04.18|
|Aged 25 and over (National Living Wage)||£8.21||£7.83|
|Aged 21 – 24||7.70||7.38|
|Aged 18 – 20||6.15||5.90|
|Aged 16 – 17||4.35||4.20|
|Child Benefit (per week)||2019/20||2018/19|
|First eligible child||£20.70||£20.70|
|Each subsequent child||13.70||13.70|
You are advised to consult us before acting on any information contained herein.