2017-18 Tax & National Insurance Rates
- 25 March 2018
- 0
As we’ve passed the end of the 2017-18 Tax Year, we thought it would be appropriate to share the relevant Income Tax Rates that apply for the year ended 5th April 2018. These rates apply when preparing and calculating your Tax payable (or repayable) on your self assessment Tax return.
2017-18 Personal Tax Allowances & Bands
| Allowance | % of income / £ allowance p.a. |
|---|---|
| Basic Rate Tax | 20% |
| Higher Rate Tax | 40% |
| Additional Rate Tax | 45% |
| Dividend Basic Rate | 7.5% |
| Dividend Higher Rate | 32.5% |
| Dividend Additional Rate | 38.1% |
| Basic Rate Tax Band | £0 – £33,500 |
| Higher Rate Tax Band | £33,500 – £150,000 |
| Additional Rate Tax Band | > £150,000 |
2017-18 UK Income Tax Rates
| Details | Rate |
|---|---|
| Personal Allowance | £11,500 |
| Limit for Personal Allowance | £100,000 – Personal Allowance reduced by £1 for every £2 above this limit |
| Marriage Allowance | £1,150 |
| Limit for Married Couple’s Allowance | £28,000 – Marriage Allowance reduced by £1 for every £2 above this limit |
| Blind Person’s Allowance | £2,320 |
| Dividend Allowance | £5,000 |
2017-18 National Insurance Allowances
| Band | £ per week / annum |
|---|---|
| Lower Earnings Limit | £113 p/w |
| Primary Threshold (PT) | £157 p/w |
| Secondary Threshold (ST) | £157 p/w |
| Upper Earnings Limit (LEL) | £866 |
| Upper Profits Limit (UPL) | £45,000 |
| Upper Secondary Threshold for Under 21s | £866 |
| Small Profits Threshold (SPT) | £6,025 |
| Lower Profits Limit (LPL) | £8,164 |
| Employment Allowance | £3,000 per employer, per annum |
| Apprentice Upper Secondary Threshold (AUST) for U25s | £866 |
2017-18 National Insurance Rates
Class 1 – Employee Rates
| Earnings | % of Income |
|---|---|
| Below LEL : £113 | 0% |
| Between LEL and PT : £113 – £157 | 0% |
| Between PT and UEL : £157 – £866 | 12% |
| Above UEL : £866 | 2% |
Class 1 – Employer Rates
| Earnings | % of Income |
|---|---|
| Below ST : £157 | 0% |
| Above ST : £157 | 13.8% |
2017-18 Self-Employed National Insurance Contribution Rates (Class 2 & 4 NIC)
Two types of National Insurance rates apply for those in self-employment or partnership. Class 2 NIC rate applies for any earnings over £6,025 per annum and is payable for each week. Class 4 applies to profits for the whole year and has it’s own brackets:
| Band | £ per week :: Class 4 NIC% of income |
|---|---|
| Below SPT : £6,025 | £0 :: 0% |
| Between SPT and LPL : £6,025 – £8,164 | £2.85 p/w :: 0% |
| Between LPL and UPL : £8,164 – £45,000 | £2.85 p/w :: 9% |
| Above £45,000 | £2.85 p/w :: 2% |
2017-18 Corporation (Limited Company) Tax Rates
Corporation Tax rates are generally a lot lower than traditional self-employed UK Income Tax rates. That being said, recent changes to dividend Tax has made this a little more problematic. It maybe worth that you incorporate as a limited company but a detailed review of your Income Tax circumstances should be carried out whilst forecasting future activities.
That being said, Corporation Tax rates are set to be reduced to 17% by 2020.
For advice on this matter it is advised that you contact our sister company Edgemark Accounting for a free consultation to see how we can help your needs.
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