Tax Card 2018/19 (Part 1)

TAXABLE INCOME BANDS AND TAX RATES

  2018/19 2017/18
Starting rate* of 0% on savings up to £5,000 £5,000
Basic rate band £34,500 £33,500
Higher rate band £34,501 – £150,000 £33,501 – £150,000
Additional rate band Over £150,000 Over £150,000
Basic rate 20% 20%
Higher rate 40% 40%
Additional rate 45% 45%
Dividend ordinary rate 7.5% 7.5%
Dividend upper rate 32.5% 32.5%
Dividend additional rate 38.1% 38.1%

* The starting rate does not apply if taxable income exceeds the starting rate limit.

Income tax in Scotland

2018/19 2018/19 rates 2017/18 2017/18 rates
Starter rate band £2,000* 19%    
Basic rate band £2,001 – £12,150 20% £31,500 20%
Intermediate rate band £12,151 – £32,423 21%    
Higher rate band £32,424 – £150,000 41% £31,501 – £150,000 40%
Top/additional rate band Above £150,000 46% Above £150,000 45%

* Assumes individuals are in receipt of the personal allowance.

Allowances that reduce taxable income or are not taxable

  2018/19 2017/18
Personal allowance* £11,850 £11,500
Personal savings allowance:

Basic rate taxpayer

Higher rate taxpayer

Additional rate taxpayer

 

£1,000

£500

£0

 

£1,000

£500

£0

Dividend allowance at 0% £2,000 £5,000
Marriage/civil partner transferable allowance** £1,185 £1,150
Trading allowance and property allowance each*** £1,000 £1,000
Rent a room allowance £7,500 £7,500
Blind person’s allowance £2,390 £2,320

* The personal allowance is reduced by £1 for each £2 of income from £100,000 to £123,700 (2017/18, £123,000).

** Any unused personal allowance maybe transferred to a spouse or civil partner who is not liable to higher or additional rate tax.

*** Note that landlords and traders with gross income from each of these sources in excess of £1,000 can deduct the allowance from their gross income as an alternative to claiming expenses.

Allowances that reduce tax

  2018/19 2017/18
Threshold £50,000 £50,000

There is a tax charge of 1% of the child benefit received for each £100 that the threshold is exceeded up to a maximum of 100%.

VEHICLE AND FUEL BENEFITS IN KIND

The taxable benefit in kind (BIK) is calculated as a percentage of the car’s UK list price. The percentage depends on the car’s CO2 emissions in grams per kilometre (g/km). Diesel cars which are certified to RDE2 standard are treated as petrol-fuelled

Emissions Petrol               Diesel
0 – 50g/km 13% 17%
51 – 75g/km 16% 20%
76 – 94g/km 19% 23%
Over 94g/km add 1% for every 5g/km or part thereof
180g/km* and over  37% maximum

* Over 159g/km for diesel.

The list price is on the day before first registration, including most accessories and is reduced by any employee’s capital contribution (max £5,000) when the car is first made available.

Where the cost of all fuel for private use is borne by the employee, the fuel benefit is nil. Otherwise, the fuel benefit is calculated by applying the car benefit percentage (above) to £23,400 (2017/18, £22,600).

Vans where private use is more than home to work travel; £3,350 (2017/18, £3,230) benefit and £633 (2017/18, £610) for private fuel. Payments by employees for private use may reduce these BIK. Vans with zero emissions have a benefit of £1,340 (2017/18, £646).

TAX-FREE MILEAGE ALLOWANCES

Cars and vans First 10,000 business miles 45p
Thereafter 25p
Motorcycles 24p
Bicycles 20p
Business passenger 5p

For national insurance purposes: 45p for all business miles for cars and vans.

CAPITAL GAINS TAX

  2018/19 2017/18
Main rates Individual basic rate 10% 10%
Individual above basic rate 20% 20%
Trusts and estates 20% 20%
Gains on residential property not eligible for PPR relief and carried interest – surcharge 8% 8%
Annual exemption Individuals £11,700 £11,300
Trusts £5,850 £5,650
Entrepreneurs’ relief Applicable rate 10% 10%
Lifetime limit £10m £10m
Investors’ relief Applicable rate 10% 10%
Lifetime limit £10m £10m

INHERITANCE TAX

  2018/19 2017/18
Nil-rate band threshold* £325,000 £325,000
Main residence nil-rate band** £125,000 £100,000
Combined threshold limit for married couples and civil partners, including main residence nil-rate band £900,000 £850,000

* Up to 100% of any unused part of a deceased person’s nil-rate band can be claimed by the surviving spouse/civil partner on their death. This also applies to the main residence nil-rate band, albeit the main residence nil-rate is subject to the taper withdrawal below.

** For estates worth in excess of £2m, a 50% taper withdrawal applies.