We have summarised the key rates and allowances which are fundamental to our business and personal lives. We are sure that you will find them a useful point of reference and have set out below a few examples of how they can be used.

Personal tax rates

As the UK tax system becomes more devolved, it is important to keep abreast of the changes taking place in the Scottish and Welsh income tax rates and bands. We have summarised the relevant information together with the rates and allowances which apply to investment income.

Buying property

If you buy property then property taxes payable are different depending where the property is in the United Kingdom. Stamp Duty Land Tax is payable on property in England and Northern Ireland, whilst Land and Buildings Transaction Tax is payable on property in Scotland and Land Transaction Tax on property in Wales. Our tax rates highlight the main rates so that you can consider the potential cost of buying property.

Asset sales

If you sell an asset such as land, capital gains tax may be due. Our tax rates highlight the main rates and reliefs so that you can consider the tax bill that may arise.

Rates for businesses

If you run a business, obtaining the right allowances on equipment that your business buys can affect the tax that your business has to pay each year. The Annual Investment Allowance has increased from 1 January 2019 to £1,000,000 per annum. We have summarised the main allowances that are available.

Rates for employees

There are increases in the percentage charges for company car benefits again this year. Our guide explains how these are computed to help ensure that you are paying the correct amount of tax.

There are increases in the percentage charges for company car benefits again this year. Our guide explains how these are computed to help ensure that you are paying the correct amount of tax.

Rates that affect us all

Long term planning for a comfortable retirement can never start too early. Our tax rates explain how much can be contributed to an approved pension scheme each year tax efficiently.

Our tax rates contain the main inheritance tax rates and exemptions but early planning can mitigate these tremendously.


These rates are intended for use as a quick point of reference. Should you require any further information, have a simple question or require detailed advice we are only a phone call awa

 

Capital allowances - plant and machinery
  • The cost of purchasing capital equipment in a business is not a revenue tax deductible expense. However, tax relief is available on certain capital expenditure in the form of capital allowances.
  • Plant and machinery allowances may be available on items such as machines, equipment, furniture, certain fixtures in a building (‘integral features’), computers, cars, vans and similar equipment used in a business.
  • There are special rules for cars and certain ‘environmentally friendly’ equipment.
  • Plant and machinery allowances may be available to owners of commercial property which is let out to a business.
  • The Annual Investment Allowance (AIA) gives a 100% write-off on most types of plant and machinery (but not cars) up to an annual limit.
  • Writing down allowances (WDA) are given for expenditure for which AIA is not, or cannot be, claimed.
  • Structures and Buildings Allowance is introduced from 29 October 2018 at a rate of 2% on a straight line basis.

AIA

  • Special rules apply to accounting periods straddling the dates shown in the tables below.
  • The AIA may need to be shared between certain businesses under common ownership.

AIA limits – companies

Expenditure incurred:

Annual limit

£
From 1 January 2016 to 31 December 2018200,000
From 1 January 20191,000,000

AIA limits – sole traders and partnerships

Expenditure incurred:

Annual limit

£
From 1 January 2016 to 31 December 2018200,000
From 1 January 20191,000,000

Other plant and machinery allowances

  • Expenditure upon which AIA is not given/claimed will obtain relief through the ‘main rate pool’ or the ‘special rate pool’ rather than each item being dealt with separately.
  • The annual rate of WDA is 18% in the ‘main rate pool’ and 6% in the ‘special rate pool’. The 8% WDA is reduced to 6% from April 2019. Special rules apply to accounting periods straddling this date.
  • A 100% first year allowance (FYA) may be available on certain energy efficient plant and cars.

Cars

  • For expenditure incurred on cars, costs are generally allocated to one of the two plant and machinery pools.
  • AIA is not available on any car but a 100% first year allowance may be available on certain cars. To qualify for first year allowance, the car must be purchased new.

Cars acquired from April 2018

Emissions (g/km)

Pool

Allowance

≤50Main rate100% FYA
≤ 110Main rate18% WDA
>110Special rate6% WDA
Capital gains tax (CGT)
  • CGT is payable by individuals, trustees and personal representatives (PRs). Companies pay corporation tax on their capital gains.
  • There are annual tax-free allowances (the ‘annual exempt amount’) for individuals, trustees and PRs. Companies do not have an annual exempt amount.
  • For individuals, net gains are added to total taxable income to determine the appropriate rate of tax. The standard rate applies only to the net gains which, when added to total taxable income, do not exceed the basic rate band.
  • Gains which qualify for Entrepreneurs’ Relief or Investors’ Relief are charged at 10% for the first £10m of qualifying gains.

Rates and annual exemption 2019/20

Individuals 2019/20
£
Exemption12,000
Standard rate10%
Higher rate20%

The higher rate applies to higher rate and additional rate taxpayers.

Additionally, higher rates of 18% and 28% may apply to the disposal of certain residential property.

Trusts 2019/20
£
Exemption6,000
Rate20%
Car benefits
  • The car benefit is calculated by multiplying the car’s list price, when new, by a percentage linked to the car’s CO2 emissions.
  • For diesel cars generally add a 4% supplement (unless the car is registered on or after 1 September 2017 and meets the Euro 6d emissions standard). The overall maximum percentage is capped at 37%.
  • The list price includes accessories.
  • The list price is reduced for capital contributions made by the employee up to £5,000.
  • Special rules may apply to cars provided for disabled employees.
  • For cars registered before 1 January 1998 and cars with no agreed CO2 emissions the charge is based on engine size.
CO2 emissions (g/km)
(round down to nearest 5g/km for values above 95)
% of car’s list price taxed
0-5016
51 up to 7519
76 up to 9422
9523
10024
10525
11026
11527
12028
12529
13030
13531
14032
14533
15034
15535
16036
165 and above37
Car fuel benefit
  • Car fuel benefit applies if an employee has the benefit of private fuel for a company car.
  • The benefit is calculated by applying the percentage used to calculate the car benefit by a ‘fuel charge multiplier’.
  • The charge is proportionately reduced if provision of private fuel ceases part way through the year. The fuel benefit is reduced to nil only if the employee pays for all private fuel.
Car fuel benefit 2019/20
Fuel charge multiplier£24,100
Cars - advisory fuel rates for company cars
  • Advisory rates only apply where employers reimburse employees for business travel in a company car or require employees to repay the cost of fuel used for private travel in a company car.
  • If the rate paid per mile of business travel is no higher than the advisory rate for the particular engine size and fuel type of the car, HMRC will accept that there is no taxable profit and no Class 1 NIC liability.

The advisory fuel rates for journeys undertaken on or after 1 March 2019 are:

Engine size Petrol
1400cc or less11p
1401cc – 2000cc14p
Over 2000cc21p
Engine size Diesel
1600cc or less10p
1601cc – 2000cc 11p
Over 2000cc 13p
Engine size LPG
1400cc or less 7p
1401cc – 2000cc 8p
Over 2000cc 13p

Hybrid cars are treated as either petrol or diesel cars for this purpose.

Child Benefit
Child Benefit is receivable by a person responsible for each child until they reach 16, or 19 if they stay in education or training.If the person (or their spouse or partner) has ‘adjusted net income’ above £50,000 the person with the highest income has to pay some of the Child Benefit as a tax charge.

 

Where adjusted net income is more than £60,000 a year, the tax charge equals the Child Benefit received.

Rates – 2019/20 £ per week
Eldest/Only Child£20.70
Other Children£13.70
Corporation tax rates
  • Corporation tax rates are set for each Financial Year. A Financial Year runs from 1 April to the following 31 March.
  • If the accounting period of a company straddles the 31 March, the profits are apportioned on a time basis to each Financial Year.
  • The Northern Ireland Executive has committed to setting the rate of corporation tax at 12.5% when the Northern Ireland Executive demonstrates its finances are on a sustainable footing.
Year to 31.3.20 Rate %
All profits19
Employee's Statutory Payments

Statutory pay

  • Payments may be required from an employer if an employee is not at work for a variety of reasons.
  • There are detailed conditions for an employee to qualify for any of these statutory payments.
  • Employees are only eligible for a statutory payment if they have sufficient average weekly earnings of at least the lower earnings limit.

Statutory Sick Pay

  • Payments may be required from an employer if an employee is too ill to work.
  • SSP is generally payable for a period up to 28 weeks.

Statutory Maternity Pay

  • Payments may be required from an employer when an employee takes time off to have a baby.
  • SMP is payable for a period up to 39 weeks.

Statutory Paternity Pay

  • Payments may be required from an employer when an employee takes time off during their partner’s Statutory Maternity Pay period.
  • Payment is for a period of either one or two complete weeks.

Shared Parental Pay

  • Payments may be required from an employer when an employee takes time off following the curtailment of the period of SMP by the mother.
  • Payment is for up to a maximum of 37 weeks and is dependent on the mother’s unused SMP period.

Statutory Adoption Pay

  • Payments may be required from an employer when an employee takes time off when they adopt a child.
  • Payment is for a period up to 39 weeks.
2019/20 Statutory pay rates –
average weekly earnings £118 or over
Statutory Sick Pay£94.25
Statutory Maternity Pay
First six weeks90% of weekly earnings
Next 33 weeks£148.68
Statutory Paternity Pay – 2 weeks£148.68
Statutory Adoption Pay – 39 weeks
First six weeks90% of weekly earnings
Next 33 weeks£148.68
Shared Parental Pay£148.68

With the exception of Statutory Sick Pay, statutory payments may
be payable at 90% average weekly earnings throughout the payment period
in certain circumstances. This applies where 90% weekly earnings
are less than the standard rate of £148.68.

Income tax allowance

A personal allowance gives an individual an annual amount of income free from income tax.

Income above the personal allowances is subject to income tax.

The personal allowance will be reduced if an individual’s ‘adjusted net income’ is above £100,000. The allowance is reduced by £1 for every £2 of income above £100,000.

An individual born before 6 April 1935 may be entitled to a married couple’s allowance but this is reduced if ‘adjusted net income’ is above the married couple’s allowance income limit (see table below).

Marriage allowance – 10% of the personal allowance may be transferable between certain spouses where neither pays tax above the basic rate. The Marriage allowance is not available to couples entitled to the Married Couple’s allowance.

Income tax personal allowances £
Personal Allowance 12,500
Marriage Allowance 1,250
Blind person’s allowance 2,450
Married couple’s allowance
Either partner born before 6 April 1935
– Maximum reduction in tax bill891.50
– Minimum reduction in tax bill345.00
Married couple’s allowance income limit
Reduce married couple’s allowance by £1 for every £2 of ‘adjusted net income’ above this limit
29,600
Income tax rates
  • Income tax applies to the amount of income after deduction of personal allowances.
  • Income is taxed in a specific order with savings and dividend income taxed last.
  • Dividend income and savings income falling within the dividend and savings allowances still form part of total income of an individual.
  • The starting rate band is only applicable to savings income. The 0% rate is not available if the taxable amount of non-savings income exceeds the starting rate band.
  • The Scottish Parliament set the rates of income tax and the limits at which these rates apply for Scottish residents on non-savings and non-dividend income.

Income tax rates 2019/20

Band of taxable income Rate Rate if dividends
£%%
0 – 5,000Starting rate for savings0N/A
0 – 37,500Basic rate207.5
37,501 – 150,000Higher rate4032.5
Over 150,000Additional rate4538.1
Special rates for savings and dividend income falling into above bands of taxable income
Savings Allowance
Basic rate taxpayers1,0000
Higher rate taxpayers5000
Additional rate taxpayersNilN/A
Dividend Allowance
for all taxpayers2,0000
Income tax rates - across the UK
  • Income tax applies to the amount of income after deduction of personal allowances.
  • Income is taxed in a specific order with savings and dividend income taxed last.
  • Dividend income and savings income falling within the dividend and savings allowances still form part of total income of an individual.
  • The starting rate band is only applicable to savings income. The 0% rate is not available if the taxable amount of non-savings income exceeds the starting rate band.
  • The Scottish Parliament set the rates of income tax and the limits at which these rates apply for Scottish residents on non-savings and non-dividend income.
  • Income tax is devolved to Wales from 6 April 2019 on non-savings and non-dividend income.

Income tax rates 2019/20

Band of taxable income Rate Rate if dividends
£%%
0 – 5,000Starting rate for savings0N/A
0 – 37,500Basic rate207.5
37,501 – 150,000Higher rate4032.5
Over 150,000Additional rate4538.1
Special rates for savings and dividend income falling into above bands of taxable income
Savings Allowance
Basic rate taxpayers1,0000
Higher rate taxpayers5000
Additional rate taxpayersNilN/A
Dividend Allowance
for all taxpayers2,0000
Income tax rates - Scotland
  • Scottish resident taxpayers are liable on non-savings and non-dividend income as set out below.
  • Savings income and dividend income are taxed using UK tax rates and bands.
Band of taxable income Rate
£%
0 – 2,049Starter rate19
2,050 – 12,444Basic rate20
12,445 – 30,930Intermediate rate21
30,931 – 150,000Higher rate41
Over 150,000Top rate46
Income tax rates - Wales
  • Income tax is devolved to Wales from 6 April 2019.
  • Welsh resident taxpayers continue to pay the same overall income tax rates using the UK rates and bands.
  • The total rate of income tax = UK income tax + Welsh rate of income tax
  • Savings income and dividend income are taxed using UK tax rates and bands.
Band of taxable income UK Rate Welsh Rate Total Rate
£%%%
0 – 37,500Basic rate101020
37,501 – 150,000Higher rate301040
Over 150,000Additional rate351045
Individual Savings Account (ISA)

The income from ISA investments is exempt from income tax. Any capital gains made on investments held in an ISA are exempt from capital gains tax.

Savers are able to subscribe any amounts into a cash ISA, a stocks and shares ISA or an innovative finance ISA subject to not exceeding the overall annual investment limit.

Investors may transfer their investments from one kind of ISA to another.

A Help to Buy ISA provides a tax free savings account for first time buyers wishing to save for a home. The scheme provides a government bonus to each person who has saved into a Help to Buy ISA at the point they use their savings to purchase their first home. For every £200 a first time buyer saves, the government will provide a £50 bonus up to a maximum bonus of £3,000 on £12,000 of savings. The bonus will be paid in the form of a voucher when the first home is purchased. Conditions apply to the account holder and to the property purchased.

The Lifetime ISA is available for those aged between 18 and 40. Save up to £4,000 each year up until the age of 50, and receive a government bonus of 25% (a bonus of up to £1,000 a year). Savers can use some or all of the money to buy their first home, or keep it until they are aged 60 when the account can be accessed tax free. Conditions apply to the account holder and property purchased.  Penalties apply if funds are withdrawn in other circumstances.

ISA limits 2019/20
Overall annual investment limit£20,000
Junior ISA annual investment limit£4,368
Help to Buy ISA monthly subscription limit (initial deposit limit £1,200)£200
Lifetime ISA annual investment limit£4,000
Inheritance tax (IHT)
  • IHT may be payable when an individual’s estate is worth more than the IHT nil rate band when they die.
  • Lifetime and death transfers between UK domiciled spouses are exempt from IHT.
  • For 2019/20, a further nil rate band of £150,000 (2018/19 – £125,000) may be available in relation to current or former residences.
  • The IHT threshold available on death may be increased for surviving spouses as there may have been a nil rate band not used, or not fully used, on the previous death.
  • There are reliefs for some business and farming assets which reduce their value for IHT purposes.
  • IHT may also be payable on gifts made in an individual’s lifetime but within seven years of death.
  • Some lifetime gifts are exempt.
  • Transfers of assets into trust made in an individual’s lifetime may be subject to an immediate charge but at lifetime rates.
  • There are also charges on some trusts.

IHT rates and nil rate band 2019/20 and 2018/19

IHT nil rate£325,000
Lifetime rate20%
Death rate40%
Death rate if sufficient charitable legacies made36%

IHT reliefs for lifetime gifts

Annual exemption £3,000
Small gifts £250
Marriage
– parent£5,000
– grandparent£2,500
– bride/groom£2,500
– other£1,000

IHT – reduced charge on gifts within seven years of death

Years before death % of death charge
0-3100
3-480
4-560
5-640
6-720
Land and Buildings Transaction Tax

Land and Buildings Transaction Tax (LBTT) is payable on land and property transactions in Scotland.

LBTT (Residential property)

Consideration (£)Rate
0 – 145,0000%
145,001 – 250,0002%
250,001 – 325,0005%
325,001 – 750,00010%
750,001 and above12%

The rates apply to the portion of the total value which falls within each band.

Residential rates may be increased by 4% (3% prior to 25 January 2019)  where further residential properties, costing over £40,000, are acquired.

First-time Buyer relief raises the zero rate tax threshold for first-time buyers from £145,000 to £175,000.

LBTT (Non-residential)

Consideration (£)Rate
0 – 150,0000%
150,001 – 250,0001%
Over 250,0005%

The rates apply to the portion of the total value which falls within each band. Different rates and bands applied prior to 25 January 2019.

Land Transaction Tax

Land Transaction Tax (LTT) is payable on land and property transactions in Wales.

LTT (Residential property)

Consideration (£)Rate
0 – 180,0000%
180,001 – 250,0003.5%
250,001 – 400,0005%
400,001 – 750,0007.5%
750,001 – 1,500,00010%
1,500,000 and above12%

The rates apply to the portion of the total value which falls within each band. Residential rates may be increased by 3% where further residential properties, costing over £40,000, are acquired.

LTT (Non-residential)

Consideration (£)Rate
0 – 150,0000%
150,001 – 250,0001%
250,001 – 1,000,0005%
Over 1,000,0006%

The rates apply to the portion of the total value which falls within each band.

Mileage Allowance Payments (MAPs) for employees
  • MAPs represent the maximum tax free mileage allowances an employee can receive from their employer for using their own vehicle for business journeys.
  • An employer is allowed to pay an employee a certain amount of MAPs each year without having to report payments to HMRC.
  • If the employee receives less than the statutory rate, tax relief can be claimed on the difference.

MAP rates per business mile 2019/20 and 2018/19

Cars and vans Rate per mile
Up to 10,000 miles45p
Over 10,000 miles25p
Bicycles 20p
Motorcycles 24p
Minimum Wage
  • National Minimum Wage rates apply to employees up to the age of 24.
  • National Living Wage rates apply to employees 25 and over.
  • The Apprentice rate applies to apprentices under 19, or 19 and over in the first year of apprenticeship.
  • Penalties apply to employers who fail to pay minimum wages.
Age25+21-2418-2016-17Apprentice
From 1 April 2019£8.21£7.70£6.15£4.35£3.90
National Insurance contributions (NIC) - rates and allowances
  • Employees start paying Class 1 NIC from age 16 (if sufficient earnings).
  • Employers pay Class 1 NIC in accordance with the table below.
  • Employer NIC for employees under the age of 21 and apprentices under the age of 25 is reduced from the normal rate of 13.8% to 0% up to the Upper Secondary Threshold.
  • Employees’ Class 1 NIC stop when they reach their State Pension age. The employer’s contribution continues.

Employees – Class 1 – 2019/20

Earnings per week %
Up to £166Nil
£166.01 – £96212
Over £9622

Entitlement to state pension and other contribution-based benefits is retained for earnings between £118 and £166 per week.

Employers – Class 1 – 2019/20

Earnings per week %
Up to £166Nil
Over £16613.8
Upper Secondary Threshold (for under 21s and apprentices under 25)
Up to £962
0%

Other National Insurance payable by employers

Class 1A – 13.8% on broadly all taxable benefits provided to employees

Class 1B – 13.8% on PAYE Settlement Agreements

Self-employed – Class 2 and 4

  • A self-employed person starts paying Class 2 and Class 4 NIC from 16 or over (if sufficient profits)
  • Class 2 NIC stop when a person reaches State Pension age
  • Class 4 NIC stop from the start of the tax year after the one in which the person reaches State Pension age.

Self-employed – Class 2 – 2019/20

Flat rate per week£3.00
Small Profits Threshold£6,365 per year

No Class 2 is due if the amount of trading profits assessable to income tax and Class 4 NIC is below this figure. However, a person might decide to carry on paying Class 2 voluntarily to accrue entitlement to the State Pension and entitlement to other benefits.

Class 4 – 2019/20

Annual profits %
Up to £8,632Nil
£8,632.01 – £50,0009
Over £50,0002

Class 3

  • A person needs 35 years (30 years if State Pension age is before 6 April 2016) of NIC to get a full State Pension.
  • Class 3 voluntary contributions can be paid to fill or avoid gaps in a NI record.

Class 3 – 2019/20

Flat rate per week £15.00

Pensions Automatic Enrolment

Auto enrolment places duties on employers to automatically enrol ‘workers’ into a work based pension scheme. Employers are required to automatically enrol all ‘eligible jobholders’ into a qualifying pension scheme and pay pension contributions on their behalf.

Phasing in of contributions

Employer minimum contribution Total minimum contribution
6 April 2018 to 5 April 20192%5%
6 April 2019 onwards3%8%

Where the employer does not make the total minimum contribution the employee is obliged to pay the balance.

2019/20
Automatic enrolment earnings trigger£10,000
Qualifying earnings band – lower limit£6,136
Qualifying earnings band – upper limit£50,000
Pensions - tax relief on pension contributions
  • Tax relief available for personal contributions is the higher of £3,600 (gross) or 100% of relevant earnings.
  • Any contributions in excess of £40,000, whether personal or by the employer, may be subject to income tax on the individual.
  • The limit may be reduced to £4,000 once money purchase pensions are accessed.
  • Where the £40,000 limit is not fully used it may be possible to carry the unused amount forward for three years.
  • The annual allowance is tapered for those with adjusted income over £150,000. For every £2 of income over £150,000 an individual’s annual allowance will be reduced by £1, down to a minimum of £10,000.
  • Employers will obtain tax relief on employer contributions if they are paid and made ‘wholly and exclusively’ for the purposes of the business. The tax relief for large contributions may be spread over several years.

 

Property allowance
  • A property allowance is available to individuals.
  • The property allowance will not apply to partnership income or to income on which rent a room relief is given.
Income up to £1,000Property income assessable NIL
Income over £1,000Election to deduct £1,000 rather than the actual expenses
Self assessment - key dates

31 January 2019 – First payment on account due for 2018/19 tax year.

31 July 2019 – Second payment on account for 2018/19 tax year.

5 October 2019 – Deadline for notifying HMRC of new sources of income (including the Child Benefit charge) if no tax return has been issued for 2018/19 tax year.

31 October 2019 – Deadline for submission of 2018/19 non-electronic returns.

30 December 2019 – Deadline for submission of 2018/19 electronic tax returns if ‘coding out’ of any underpayment is required.

31 January 2020 – Deadline for filing electronic tax returns for 2018/19. Balancing payment due for 2018/19 tax year. First payment on account due for 2019/20 tax year.

Stamp Duty

When you buy shares, you usually pay a tax or duty of 0.5% on the transaction. If you buy shares electronically Stamp Duty Reserve Tax (SDRT) is payable. For shares purchased using a stock transfer form, you will pay Stamp Duty if the transaction is over £1,000.

Stamp Duty Land Tax (SDLT)
  • SDLT is payable on land and property transactions in England and Northern Ireland.
  • Property transactions in Scotland are subject to Land and Buildings Transaction Tax (LBTT).
  • Property transactions in Wales are subject to Land Transaction Tax (LTT).

Residential property

The rates apply to the portion of the total value which falls within each band.

Consideration (£)Rate
0 – 125,0000%
125,001 – 250,0002%
250,001 – 925,0005%
925,001 – 1,500,00010%
1,500,001 and above12%

These rates may be increased by 3% where further residential properties, costing over £40,000, are acquired.

First-time Buyer relief

First-time buyers may be eligible for first-time buyer relief on purchases of residential property up to £500,000. The rates apply to the portion of the total value which falls within each band.

Consideration (£)Rate
0 – 300,0000%
300,001 – 500,0005%
for purchases over 500,000normal rates apply

Non-residential SDLT rates

Consideration (£)Rate
0 – 150,0000%
150,001 – 250,0002%
Over 250,0005%

Payable on consideration which falls in each band.

State Pensions
  • The basic State Pension is a regular payment from the government that an individual may be entitled to when they reach State Pension age.
  • The basic State Pension depends on the number of years an individual has paid National Insurance or has National Insurance credits, eg while unemployed or claiming certain benefits.
  • To receive the basic State Pension an individual must have paid or been credited with National Insurance contributions (NIC).
  • In 2016 the State Pension was reformed into a single-tier new State Pension. In order to benefit from the full amount the individual will need 35 years, rather than the previous 30 years of NIC or credits for the full amount, with pro-rating where 35 years is not achieved. You will usually need 10 qualifying years to get any State Pension. The amount an individual receives can be higher or lower depending on their National Insurance record. It will only be higher if you have over a certain amount of Additional State Pension.
  • Currently an individual may also be entitled to the Additional State Pension. How much an individual gets depends on the number of qualifying years of NIC, the amount of earnings and whether the individual has been contracted out of the scheme.
Weekly State Pension 2019/20
Basic – single person£129.20
New State Pension£168.60
Tax reliefs for individuals

Enterprise Investment Scheme (EIS)

The Enterprise Investment Scheme (EIS) provides tax relief for individuals prepared to invest in new and growing companies. Investors can obtain generous income tax and capital gains tax (CGT) breaks for their investment and companies can use the relief to attract additional investment to develop their business. Individuals are entitled to relief on investments in certain unquoted trading companies through EIS. A junior version of EIS the SEIS is also available.

Maximum investment per annum£1,000,000
Additional investment limit where investing in knowledge-intensive companies£1,000,000
Income tax relief30%
CGT treatment on disposal if held for 3 yearsExempt

Capital gains from the disposal of other assets may be deferred by making an EIS investment.

Seed Enterprise Investment Scheme (SEIS)

The Seed Enterprise Investment Scheme (SEIS) provides tax relief for individuals prepared to invest in new and growing companies. Investors can obtain generous income tax and capital gains tax (CGT) breaks for their investment and companies can use the relief to attract additional investment to develop their business. SEIS is a junior version of EIS.

Maximum investment per annum£100,000
Income tax relief50%
CGT treatment on disposal if held for 3 yearsExempt

An individual who makes a capital gain on another asset and uses the amount of the gain to make a SEIS investment will not pay tax on 50% of the gain (subject to certain conditions).

Social Investment Relief (SIR)

Social Investment Relief (SIR) is designed to encourage private individuals to invest in social enterprises including charities. Individuals are entitled to relief on their investment:

Maximum investment per annum£1,000,000
Income tax relief30%
CGT treatment on disposal if held for 3 yearsExempt

Capital gains from the disposal of other assets may be deferred by making a SIR investment.

(All reliefs are subject to detailed conditions being met.)

Venture Capital Trusts (VCTs)

Venture Capital Trusts (VCTs) are designed to encourage private individuals to invest in smaller high-risk unquoted trading companies. VCTs operate by indirect investment through a mediated fund. In effect they are very like the investment trusts that are obtainable on the stock exchange, albeit in a high-risk environment. Individuals are entitled to relief on investments in VCTs.

Maximum investment per annum£200,000
Income tax relief30%
Dividend incomeExempt
Capital gains treatment on disposalExempt
Trade allowance

 

  • A Trade Allowance is available to individuals.
  • There is an equivalent rule for certain miscellaneous income. This will apply to the extent that the £1,000 trading allowance is not used against trading income.
  • The trade allowance is not available against partnership income.
Income up to £1,000Profits assessable NIL
Income over £1,000Election to deduct £1,000 allowance rather than the actual expenses

 

Van benefit
  • Van benefit is chargeable if the van is available for an employee’s private use.
  • A fuel benefit may also be chargeable if an employee has the benefit of private fuel paid for in respect of a company van.
  • The charges do not apply to vans if a ‘restricted private use condition’ is met throughout the year.
  • A reduced benefit charge may apply to vans which cannot emit CO2 when driven.
Van benefits 2019/20
Van benefit£3,430
Fuel benefit£655
VAT
  • Registered businesses charge VAT on their sales. This is known as output VAT and the sales are referred to as outputs.
  • Similarly VAT is charged on most goods and services purchased by the business. This is known as input VAT.
  • There are three rates: standard which applies to most goods and services, reduced rate for some goods and services such as home energy and zero rate goods and services, for example, most food and children’s clothes.
  • Some supplies are exempt from VAT for example postage stamps, financial and insurance transactions.
  • A business is required to register for VAT if the value of taxable supplies exceeds the annual registration limit.
  • The government has frozen the VAT registration and deregistration limits for two years from 1 April 2018.
VAT – rates and limits 2019/20
Standard rate20%
Reduced rate5%
Annual Registration Limit
– from 1.4.19 – 31.3.20
£85,000
Annual Deregistration Limit
VAT fuel scale charges
Businesses must use these new VAT fuel scale charges from the start of their next prescribed accounting period beginning on or after 1 May 2018.

Rates will be updated once they are available.

CO2
band
Gross monthly
£
VAT
£
Net
£
120 or less467.6738.33
1257011.6758.33
1307412.3361.67
1357913.1765.83
1408414.0070.00
1458814.6773.33
1509315.5077.50
1559816.3381.67
16010217.0085.00
16510717.8389.17
17011118.5092.50
17511619.3396.67
18012120.17100.83
18512520.83104.17
19013021.67108.33
19513522.50112.50
20014023.33116.67
20514524.17120.83
21014924.83124.17
21515425.67128.33
22015926.50132.50
225 or more16327.17135.83
CO 2
band
Gross 3 month period £ VAT
£
Net
£
120 or less14023.33116.67
12521035.00175.00
13022437.33186.67
13523839.67198.33
14025242.00210.00
14526644.33221.67
15028046.67233.33
15529549.17245.83
16030951.50257.50
16532353.83269.17
17033656.00280.00
17535158.50292.50
18036560.83304.17
18537963.17315.83
19039365.50327.50
19540767.83339.17
20042170.17350.83
20543672.67363.33
21044974.83374.17
21546377.17385.83
22047779.50397.50
225 or more49181.83409.17
CO 2
band
Annual gross
£
VAT
£
Net
£
120 or less56293.67468.33
125842140.33701.67
130900150.00750.00
135954159.00795.00
1401,013168.83844.17
1451,067177.83889.17
1501,125187.50937.50
1551,179196.50982.50
1601,238206.331,031.67
1651,292215.331,076.67
1701,350225.001,125.00
1751,404234.001,170.00
1801,463243.831,219.17
1851,517252.831,264.17
1901,575262.501,312.50
1951,630271.671,358.33
2001,688281.331,406.67
2051,742290.331,451.67
2101,801300.171,500.83
2151,855309.171,545.83
2201,913318.831,594.17
225 or more1,967327.831,639.17

Where the CO2 emission figure is not a multiple of five, the figure is rounded down to the next multiple of five to determine the level of the charge.

For a bi-fuel vehicle which has two CO2 emissions figures, the lower of the two figures should be used.

For cars which are too old to have a CO2 emissions figure, you should identify the CO2 band based on engine size. If its cylinder capacity is:

  • If its cylinder capacity is 1,400cc or less, use CO2 band 140
  • If its cylinder capacity exceeds 1,400cc but does not exceed 2,000cc, use CO2 band 175;
  • If its cylinder capacity exceeds 2,000cc, use CO2 band 225 or above.
Vehicle Excise Duty (VED) - passenger cars

For vehicles first registered on or after 1 April 2017, the VED or ‘Road Tax’ rate for the first 12 months is based on CO2 emissions shown on the V5 (Registration Document).

Subsequent years are charged at the standard rate. Cars with a list price of over £40,000 when new pay an additional rate of £320 per year on top of the standard rate, for 5 years.

New diesel vehicles registered after 1 April 2018 that do not meet the Euro 6d emissions standard are charged a supplement on their First Year Rate to the effect of moving up by one VED band.

VED bands and rates for cars first registered on or after 1 April 2017

CO2 emissions (g/km) Standard rate First year rate
0£0£0
1-50£145£10
51-75£145£25
76-90£145£110
91-100£145£130
101-110£145£150
111-130£145£170
131-150£145£210
151-170£145£530
171-190£145£855
191-225£145£1280
226-255£145£1815
Over 255£145£2135

VED bands and rates for cars registered on or after 1 March 2001 but before 1 April 2017

VED band CO 2 emissions (g/km) Standard rate
AUp to 100£0
B101-110£20
C111-120£30
D121-130£125
E131-140£145
F141-150£160
G151-165£200
H166-175£235
I176-185£260
J186-200£300
K201-225*£325
L226-255£555
MOver 255£570

*Including cars emitting over 225g/km registered before 23 March 2006.

Disclaimer

This article is published for the information of clients. It provides only an overview of the regulations in force at the date of publication and no action should be taken without consulting the detailed legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this publication can be accepted by the authors or the firm.

Our offices

Pegasus House, 463a Glossop Road, Sheffield, S10 2QD

5 Sidings Court, White Rose Way, Doncaster, DN4 5NU

Jubilee House, 32 Duncan Close, Moulton Park, Northampton, NN3 6WL

Northampton

01604 645 600

Contact

Get in touch

All content © 2019 Hawsons

Pin It on Pinterest

Share or print...

Shares