Personal Taxation

Income tax allowances and reliefs

2019/20

2018/19

Personal allowance1

£12,500

£11,850

Marriage / Civil partner's transferable allowance

£1,250

£1,190

Married couples' / Civil partners' allowance at 10%2
(if at least one born before 6/4/35)



maximum
minimum



£8,915
£3,450



£8,695
£3,360

Blind person's allowance

£2,450

£2,390

Rent-a-room tax-free income

£7,500

£2,390

Lifetime allowance

£1,055,000

£1,030,000

Money purchase annual allowance

£4,000

£4,000

Annual allowance3

£40,000

£40,000

1 Personal allowance reduced by £1 for every £2 of adjusted net income over £100,00

2 Reduced by £1 for every £2 of adjusted net income over £29,700 (£28,900 for 2018/19), until minimum reached

3 Subject to 50% taper down to £10,000 if threshold income over £110,000 and adjusted income over £150,000

Income tax rates and bands

   

UK excluding Scottish taxpayers non-savings income

2019/20

2018/19

20% basic rate on income up to:

£37,500

£34,500

40% higher rate on income over:

£37,500

£33,500

45% additional rate on income over:

£150,000

£150,000

All UK taxpayers

Starting rate at 0% – on savings income up to4

£5,000

£5,000

Savings allowance at 0% tax:

basic rate taxpayers

£1,000

£1,000

higher rate taxpayers

£500

£500

additional rate taxpayers

£0

£0

Dividend allowance at 0% tax – all individuals

£2,000

£5,000

Tax rate on dividend income:

basic rate taxpayers

7.5%

7.5%

higher rate taxpayers

32.5%

32.5%

additional rate taxpayers

38.1%

38.1%

4 Not available if taxable non-savings income exceeds the starting rate band

Scottish taxpayers - non-dividend, non-savings income5

 

2019/20

2018/19

19% starter rate on income up to:

TBA

£2,000

20% basic rate on next slice of income up to:

TBA

£12,47

21% intermediate rate on next slice up to:

TBA

£32,400

41% higher rate on next slice up to:

TBA

£150,000

46% top rate on income over:

TBA

£150,000

5 To be announced - Scottish Budget to be published on 12 December 2018.

 

Trusts

   

• standard rate band generally

£1,000

£1,000

• dividends (rate applicable to trusts) 38.1% 38.1%

38.1%

38.1%

• other income (rate applicable to trusts) 45% 45%

45%

45%

Child benefit charge:
1% of benefit per £100 of income between £50,000 and £60,000.

 

Income tax

The personal allowance will increase to £12,500 and the higher rate threshold will rise to £50,000 for 2019/20. From 2021/22, the personal allowance and higher rate threshold will increase in line with inflation. The Scottish tax bands and rates for non-savings, non-dividend income will be announced in the Scottish Budget, due on 12 December.

Saver
Don’t lose your personal allowance. Your personal allowance of £12,500 in 2019/20 is reduced by 50p for every pound that your income exceeds £100,000. You could make a pension contribution or a charitable gift to bring your income below £100,000.

 

Off-payroll working in the private sector
Following consultation and the roll-out of reform in the public sector, responsibility for operating the off-payroll working rules in the private sector will move from individuals to the organisation, agency or other third party engaging the worker. The change will take effect from April 2020, with an exemption for small organisations.

Rent-a-room relief
Following consultation, there will be no new ‘shared occupancy test’ for rent-a-room relief and the existing qualifying test of letting in a main or only residence will remain.

Employment allowance
From April 2020, the employment allowance of £3,000 a year will be restricted to employers with an employer national insurance contributions (NICs) bill below £100,000 in their previous tax year.

National insurance contributions
As announced in September, Class 2 NICs will not be abolished during this Parliament. Reforms to the treatment of termination payments and income from sporting testimonials will be legislated for in the National Insurance Contributions Bill, with changes taking effect from April 2020.

Car benefit scale
The petrol car benefit charge for 2019/20 is based on CO2 emissions in grams per kilometre and the car’s list price when new. For diesel vehicles, add 3% to the scale up to 37% maximum. The scale for 2019/20 is as follows:

CO2 g/km

0-50

51-75

76-94

95 and above

Charge

16%

19%

22%

23% + 1% for each extra 5g/km over 95g/km up to max. 37%


Short-term business visitors
Eligibility for the special PAYE tax and administrative treatment of short-term business visitors from overseas branches of UK-headquartered companies will be widened from April 2020, and the deadlines for reporting and paying tax will be extended.

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