Corporation Tax
A financial year runs from 01 April to the following 31 March. If the accounting period of a company overlaps the 31st of March, the profits are then apportioned on a time basis to each financial year
The table below shows the Corporation Tax rates by year
| Year | Rate on profits below £300,000 |
| 2019-2020 | 17% |
| 2018-2019 | 19% |
| 2017-2018 | 19% |
| 2016-2017 | 20% |
Income Tax
Rates
The income tax you pay each tax year depends on:
- How much of your income is above your Personal Allowance
- How much of your income falls within each tax band
|
UK |
Rate | Band of taxable income 2018-19 | Band of taxable income 2017 – 2018 | Band of taxable income 2016 – 2017 |
Rate for Dividends |
| Starting rate for savings | 0% | Up to £5,000 | Up to £5,000 | Up to £5,000 | N/A |
| Basic rate | 20% | Up to £34,500 | Up to £33,500 | Up to £32,000 | 7.5% |
| Higher rate | 40% | £34,501 to £150,000 | £33,501 to £150,000 | £32,001 to £150,000 | 32.5% |
| Additional rate | 45% | Over £150,000 | Over £150,000 | Over £150,000 | 38.1% |
Dividend Allowance
2017 – 2018
| Band of Taxpayer | Amount | Rate (%) |
| All | £5000 | 0 |
2018 – 2019
| Band of Taxpayer | Amount | Rate (%) |
| All | £2000 | 0 |
Allowance
A personal allowance is the amount of income a personal can get before they pay tax. Income above the personal allowance is subject to income tax.
The personal allowance goes down by £1 for every £2 of income above the £100,000 limit.
| Allowance: | 2018 – 2019 | 2017 – 2018 |
| Personal Allowance | £11,850 | £11,500 |
Minimum Wage
These are the Rates for the National Living Wage and National Minimum Wage. The rates change every April.
| Year | 25 and Over | 21 – 24 | 18 – 20 | Under 18 | Apprentice |
| Apr 18 – | £7.83 | £7.38 | £5.90 | £4.20 | £3.40 |
| Apr 17 – Mar 18 | £7.50 | £7.05 | £5.60 | £4.05 | £3.50 |
| Oct 16 – Mar 17 | £7.20 | £6.95 | £5.55 | £4.00 | £3.40 |
| Apr 16 – Sept 16 | £7.20 | £6.70 | £5.30 | £3.87 | £3.30 |
National Insurance
The rates and thresholds for National Insurance Contributions for 2017 – 2018 are:
| Class: | Weekly earning | Rate |
| Emp’r Class 1 above Primary Threshold | Above £157 | 13.8% |
| Employee’s class 1 | From £157 to £866 | 12% |
| Employee’s additional class 1 | Above £866 | 2% |
| Self-Employed Class 2 (per week) | – | £2.85
|
| Self-Employed Class 4 | From £8,164 to £45,000 | 9% |
| Self-Employed Class 4 Additional rate | Above £45,000 | 2% |
Rates for 2018 – 2019
| Class | Weekly Earnings | Rate |
| Emp’r Class 1 above Primary Threshold | Above £162
| 13.8% |
| Employee’s class 1 | From £162 to £892 | 12% |
| Employee’s additional class 1 | Above £892 | 2% |
| Self-Employed Class 2 (per week) | From £162 to £892 | £2.95 |
| Self-Employed Class 4 | From £8,424 to £46,350 | 9% |
| Self-Employed Class 4 Additional rate | Above £46,350 | 2% |
Automatic Enrolment
Under the Pensions Act 2008, all employers within the UK must enrol all ‘eligible jobholders; into the pension scheme and contribute towards this.
| Date | Employer minimum contribution | Total minimum contribution |
| Old Rates, up until 5 April 2018 | 1% | 2% (incl. 1% staff contribution) |
| Currently, from 6 April 2018 to 5 April 2019 | 2% | 5% (incl. 3% staff contribution) |
| 6 April 2019 onwards | 3% | 8% (incl. 5% staff contribution) |
State Pension
You can claim the basic State Pension if you are:
- A man born before 6 April 1951
- A woman born before 6 April 1953
To get the basic State Pension you must have paid or been credited with National Insurance contributions. The most you can currently get is £125.95 per week.
If you were born later, you will need to claim the new State Pension.
You can claim the new State Pension if you are:
- A man born on or after 6 April 1951
- A woman born on or after 6 April 1953
The earliest you can get the new State Pension is when you reach the State Pension Age. If however you reach the State Pension age before 6th April 2016, you will get the State Pension under the old rules.
You need at least 10 qualifying years on your national insurance record to get any State Pension. The amount an individual may receive can be higher or lower depending on your national insurance records.
Value added Tax (VAT)
VAT registered business charge VAT on their Sales (Output). Similarly VAT is charges on most good and also services that are purchased by the business (Input).
There are three rates that are used:
- Standard – Applies to most goods and services
- Reduced – Applies to some goods and services (home energy)
- Zero – Applied to most foods and children’s clothes
- Exempt – Supplies such as postage stamps, financial and insurance transactions
- If the taxable supplied excess the annual threshold, the business is required to register for VAT.
- The thresholds for registering, deregistering or joining a VAT Accounting scheme from 1st April 2017.
| Circumstances | Thresholds |
| VAT Registration | More than £85,000 |
| Deregistration | Less than £83,000 |
VAT Accounting Scheme Threshold:
| VAT accounting Scheme | Threshold to join scheme | Threshold to leave scheme |
| Flat Rate Scheme | £150,000 or less | More than £230,000 |
| Cash Accounting Scheme | £1.35 million or less | More than £1.6 million |
| Annual Accounting | £1.35 million or less | More than £1.6 million |