TAX RATES AND TABLES

 

INTRODUCTION
Our Tax Rates provides a summary of some of the essential tax rates, dates and figures for 2017/18.
These Tax Rates are for guidance only and professional advise should be obtained before acting on any information
contained as no responsibility can be accepted for loss occasioned as a result of action taken or refrained
from in consequence of its contents.
INCOME TAX
Tax Rates 2016/17 2017/18
Basic Rate Band £32,000 £33,500
Basic rate 20% 20%
Dividend ordinary rate 7.5% 7.5%
Higher Rate - taxable income over £32,000 £33,500
Higher tax rate 40% 40%
Additional Rate - taxable income over £150,000 £150,000
Additional tax rate 45%
45%
Dividend upper rate 32.5% 32.5%
Allowances that reduce taxable income
2016/17
2017/18
Personal allowance (PA) Under 65 £11,000 £11,500
Dividend Allowance   £5,000 £5,000
Rent A Room Allowance   £7,500 £7,500
NATIONAL INSURANCE CONTRIBUTIONS (2017/18)
Class 1 (not contracted out) Employer Employee
Lower earnings limit £157
Payable on weekly earnings
£113.00 -£157.00 13.8% NIL
£157,01 - £866 13.8% 12%
Over £866 13.8% 2%
Over state retirement age 13.8% NIL
Class 1A (on relevant benefits) 13.8% NIL
Class 1B (on PAYE settlement arrangement) 13.8% NIL
Class 2 (self employed) £148.20 per year
Limit of net earnings for exception £6,025 per annum
Class 3 (Voluntary) £14,25 per week
Class 4 (*self employed on profits)
£8,164 to £45,000 9%
Excess over £45,000 2%
*Exemption applies if state retirement age was reached by 6th April 2017
CORPORATION TAX
Corporation tax rates and bands are as follows:-
Financial year to 31 March 2017 31st March 20108
  20% 19%
CAPITAL ALLOWANCES
Plant & Machinery
Energy saving and environmentally beneficial equipment, electric and low CO2 emission cars, natural
gas, hydrogen refueling equipment, first year allowance 100% .
Annual investment allowance (AIA) - 100%
(excludes cars and expenditure alreday qualifying for 100% first year allowance).
Writing down allowance (WDA) on expenditure not qualifying for AIA:
Long-life assets, integral features of building 8%.
Other plant and machinery 18%
Cars, other than electric and low CO2 emission, 8%
VALUE ADDED TAX
  FROM 01-Apr-16 01-Apr-17
Standard Rate

20%

20%  
Gross VAT fraction 1/6 1/6  
Taxable Turnover Limits
Registration - last 12 months or next 30 days over £83,000 £85,000  
Deregistration - next 12 months under £81,000 £83,000  
Cash accounting scheme - up to £1,350,000 £1,350,000  
Optional flat rate scheme - up to £150,000 £150,000  
Annual accounting scheme - up to £1,350,000 £1,350,000  
VAT on fuel for private use in cars
Where businesses buy fuel which has some degree of private use, they must account for output VAT on a
scale charge. This is based on the CO2 emissions (rounded down to the next multiple of 5). The VAT
chargeable for quarters commencing after 1st May 2017 is as follows:-
  CO2 VAT CO2 VAT CO2 VAT
  in g/km on charge in g/km on charge in g/km on charge
up to 120 £26,00        
120 to 125

£39.00

156 to 160 £57.50 191 to 195 £75.67
126 to 130 £41.83 161 to 165 £60.00 196 to 200 £78.33
131 to 135 £44.33 166 to 170 £62.67 201 to 205 £80.83
136 to 140 £47.00 171 to 175 £65.17 206 to 210 £83.67
141 to 145 £49.50 176 to 180 £68.00 211 to 215 £86.17
146 to 150 £52.17 181 to 185 £70.50 216 to 220 £88.83
151 to 155 £54.67 186 to 190 £73.17 221 and over £91.33
   
INHERITANCE TAX
2016/17 2017/18
Standard threshold £325,000 £325,000
Combined threshold maximum for married couples £650,000 £650,000
and civil partners
Rate of Tax on balance:
Chargeable lifetime transfers 20% 20%
Transfers on, or within 7 years of, death 40% 40%
All lifetime transfers not covered by exemptions and made within seven years of death will be added back
into the estate for the purpose of calculating   the tax payable.   Tax attributable to such transfers is then reduced.
Years before death 0-3 3-4 4-5 5-6 6-7
Tax reduced by 0% 20% 40% 60% 80%
VEHICLE BENEFITS
Chargeable on all employees including directors.
1. Car benefit
2. Car fuel benefits
3. Company vans
Car Benefit
The tax you pay on your company car is governed by four factors:
 
1.   The list price of the car, on the day before it was first registered, plus certain accessories,
2.   The rate at which the car emits carbon dioxide (CO2),
3.   The fuel type,   (for most types of car, this is all the information you need to work out the taxable benefit)
4.   Your marginal rate of income tax.
 
You can find your taxable percentage for 2017/18 using the following table:
CO2 in Taxable % CO2 in Taxable    
g/km Petrol Diesel g/km Petrol Diesel      
     
0 to 50 9% 12% 141 to 145 27% 30%      
51 to 75 13% 15% 146 to 150 28% 31%      
76 to 95 17% 19% 151 to 155 29% 32%      
96 to 100 18% 21% 156 to 160 30% 33%      
101 to 105 19% 22% 161 to 165 31% 34%      
106 to 110 20% 23% 166 to 170 32% 35%      
111 to 115 21% 24% 171 to 175 33% 36%      
116 to 120 22% 25% 176 to 180 34% 37%      
121 to 125 23% 26% 181 to 185 35% 37%      
126 to 130 24% 27% 186 to 190 36% 37%      
131 to 135 25% 28% 191 to 195 37% 37%      
136 to 140 26% 29% 196 & over 37% 37%      
                 
Car fuel benefits
If the employee pays for the full cost of all fuel for private journeys (usually including home to work) there will be no
car fuel benefit.   In all other cases the full tax charge will be due.
The taxable car fuel benefit, for 2017/18, is calculated by multiplying £22,600 by the same percentage as applies (or
would apply) for the car benefit.
Example:   A company car driver has a car which, on the day before it was first registered, had a list price of £20,000.
it runs on petrol and emits 133 g/km of CO2.
If we assume the driver pays tax at 40%, the annual tax bill on the car benefit is: £20,000 x 25% x 40% = £2,000.
If the employer provides any fuel for private journeys and is not reimbursed for the cost, the 2015/16 tax bill for
the fuel benefit is: £22,100 x 25% x 40% = £2,210.
Company Vans
The taxable benefit for the unrestricted use of company vans is £3,230 (with no reduction for older vans) plus
a further £594 of taxable benefit if fuel is provided by the employer or private travel.
Van and fuel charge Van Fuel Total
Tax (20% taxpayer) £646.00 £122.00 £768.00
Tax (40% taxpayer) £1,292.00 £244.00 £1,536.00
Employer's Class 1A NIC's £445.74 £84.18 £529.92
Van drivers can avoid a benefit charge if they agree not to use the van for personal journeys.   Driving to and
from work is acceptable so long as there is a reasonable amount of business use.
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