Rates and Allowances
- Income Tax Rates
- Income Tax Reliefs
- Pension Premiums
- Individual Savings Accounts (ISAs)
- Car, Van and Fuel Benefits
- Mileage Allowance Payments
- Capital Gains Tax
- Corporation Tax
- Stamp Duty and Stamp Duty Land Tax
- Inheritance Tax
- National Insurance
- Value Added Tax
- Capital Allowances
Income Tax Rates
2021/22 | 2022/23 | ||
| Band £ | Rate % | Band £ | Rate % |
| 0 – 5,000 | 0* | 0 – 5,000 | 0* |
| 0 – 37,700 | 20** | 0 – 37,700 | 20***** |
| 37,701 – 150,000 | 40*** | 37,701 – 150,000 | 40****** |
| Over 150,000 | 45**** | Over 150,000 | 45******* |
*Only applicable to savings income. The rate is not available if taxable non-savings income exceeds £5,000 (£2,880).
** Except dividends (7.5%).
*** Except dividends (32.5%).
**** Except dividends (38.1%).
***** Except dividends (8.75%)
****** Except dividends (33.75%).
******* Except dividends 39.35%)
Other income taxed first, then savings income and finally dividends.
Income Tax Reliefs
2023/24 | 2022/23 | |
| Personal allowance* | 12,570 | 12,570 |
| *(Reduce personal allowance by £1 for every £2 of adjusted net income over £100,000.) | ||
| Married couple’s / Civil Partners' transferrable allowance | 1,260 | 1,260 |
| Married couple’s / Civil Partners' allowance at 10% (if at least one born before 6/4/1935) - maximum | 10,375 | 9,415 |
| Married couple’s / Civil Partners' allowance at 10% (if at least one born before 6/4/1935) - minimum | 4,010 | 3,640 |
| **Reduced by £1 for every £2 of adjusted net income over £34,600 (£31,400 for 2022/23), until the minimum is reached. | ||
| Blind person’s allowance | 2,870 | 2,600 |
| Rent-a-room relief | 7,500 | 7.500 |
Pension Premiums
2023/24
Tax relief available for personal contributions: higher of £10,000 (gross) or 100% of relevant earnings. Any contributions in excess of £60,000, whether personal or by the employer, may be subject to income tax on the individual.
The limit may be reduced to £10,000 once money purchase pensions are accessed.
Where the £60,000 limit is not fully used it may be possible to carry the unused amount forward for three years.
Employers will obtain tax relief on employer contributions if they are paid and made ‘wholly and exclusively’. Tax relief for large contributions may be spread over several years.
Individual Savings Accounts (ISAs)
2019/20 | 2020/21 | ||
| Overall investment limit | £20,000 | £20,000 | |
Car, Van and Fuel Benefits
Company cars 2023/24
CO2 emissions (gm/km) | % of car’s list price taxed(Registred pre 6/4/20) | % of car’s list price taxed(Registred after 5/4/20) |
| 0 | 0 | 0 |
| 1-50; Electric range >130 | 2 | 0 |
| 1-50; Electric range 70-129 | 5 | 3 |
| 1-50; Electric range 40-69 | 8 | 6 |
| 1-50; Electric range 30-39 | 12 | 10 |
| 1-50; Electric range <30 | 14 | 12 |
| 51-54 | 15 | 13 |
| 55-59 | 16 | 14 |
| 60-64 | 17 | 15 |
| 65-69 | 18 | 16 |
| 70-74 | 19 | 17 |
| 75-79 | 20 | 18 |
| 80-84 | 21 | 19 |
| 85-89 | 22 | 20 |
| 90-94 | 23 | 21 |
| 95-99 | 24 | 22 |
| 100-104 | 25 | 23 |
| 105-109 | 26 | 24 |
| 110-114 | 27 | 25 |
| 115-119 | 28 | 26 |
| 120-124 | 29 | 27 |
| 125-129 | 30 | 28 |
| 130-134 | 31 | 29 |
| 135-139 | 32 | 30 |
| 140-144 | 33 | 31 |
| 145-149 | 34 | 32 |
| 150-154 | 35 | 33 |
| 155-159 | 36 | 34 |
| 160-164 | 37 | 35 |
| 165-169 | 38 | 36 |
| 170 and above | 37 | 37 |
- For diesel cars add a 3% supplement but maximum still 37%.
- For cars registered before 1 January 1998 the charge is based on engine size.
- The list price includes accessories and is not subject to an upper limit.
- 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.
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.
Fuel charge multiplier: £24,500 (£24,100).
Van benefit per vehicle
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 charge may be due if the van cannot in any circumstances emit CO2 by being driven.
- Van benefit £688 (2023/24) and £3,600 (2022/23)
- Van Fuel benefit £757 (2023/24) and £3,960 (2022/23)
Mileage Allowance Payments
2020/21 | |
| Cars and vans | Rate per mile |
| Up to 10,000 miles | 45p |
| Over 10,000 miles | 25p |
| Bicycles | 20p |
| Motorcycles | 24p |
These rates represent the maximum tax free mileage allowances for employees using their own vehicles for business. Any excess is taxable. If the employee receives less than the statutory rate, tax relief can be claimed on the difference.
Capital Gains Tax
2022/23 | 2023/24 | |
| Individuals | ||
| Exemption | 12,300 | 6,000 |
| Standard rate | 20% | 20% |
| Higher rate* | 28% | 28% |
| Trusts | ||
| Exemption | 6,150 | 5,500 |
| Rate | 28% | 28% |
| *For higher and additional rate taxpayers. | ||
Corporation Tax
Year to 31.12.21
| Profits band £ | Rate % |
| All profits | 19 |
2017/18 to 2022/2023
| Profits band £ | Rate % |
| 0 – 300,000 | 19* |
| 300,001 – 1,500,000 | 19* |
| Over 1,500,000 | 19* |
| Standard fraction | n/a* |
2023/2024
| Profits band £ | Rate % |
| 0 – 50,000 | 19* |
| 50,001 – 250,000 | 25% and reduced by marginal relief* |
| Over 250,000 | 25* |
| Standard fraction | 3/200* |
*The profits limits are reduced for accounting periods of less than 12 months and for a company with associated companies.
Different rates apply for ring-fenced (broadly oil industry) profit.
Stamp Duty and Stamp Duty Land Tax
Land and buildings in England, Wales and N. Ireland
| Rate % | Residential* £ | Non-residential** £ | Rate % |
| 0 | 0 – 250,000 | 0 – 150,000 | 0 |
| 5 | 250,001 – 925,000 | 150,001 – 250,000 | 2 |
| 10 | 925,001 – 1.5 million | Over 250,000 | 5 |
| 12 | Above 1.5 million | - | - |
*Payable on consideration which falls in each bracket.
**Payable on total consideration once limit is breached.
SDLT is charged at 15% on interests in residential dwellings costing more than £500,000 purchased by certain non-natural persons for acquisitions with an effective date on or after 20 March 2014.
3% surcharge for purchase of second property and purchase by non-residents.
Shares and securities – rate 0.5%.
Inheritance Tax
Death | Lifetime | Chargeable transfers |
| Nil | Nil | 0 – £325,000* |
| 40% | 20% | Over £325,000* |
*Potentially increased for surviving spouses or civil partners who die on or after 9 October 2007.
Reliefs | ||||
| Annual exemption | £3,000 | Marriage | - parent | £5,000 |
| Small gifts | £250 | - grandparent | £2,500 | |
| - bride/groom | £2,500 | |||
| - other | £1,000 | |||
Reduced charge on gifts within seven years of death | |||||
| Years before death | 0-3 | 3-4 | 4-5 | 5-6 | 6-7 |
| % of death charge | 100 | 80 | 60 | 40 | 20 |
National Insurance
2023/24 Class 1 (employed) contracted in rates | |||
| Employee | Employer** | ||
| Earnings per week | % | Earnings per week** | % |
| Up to £242 | Nil* | Up to £175 | Nil |
| £183.01 – £967 | 12 | £169.01 - £967 | 13.8** |
| Over £967 | 2 | Over £962 | 13.8 |
| *Entitlement to contribution-based benefits retained for earnings between £112 and £183 per week. **The rate is 0% in relation to employees under 21 on earnings up to £962 per week. | |||
| Class 1A (employers) | 13.8% on employee taxable benefits |
| Class 1B (employers) | 13.8% on PAYE Settlement Agreements |
| Class 2 (self-employed) | flat rate per week £3.45 small profits threshold £6,725 p.a. |
| Class 3 (voluntary) | flat rate per week £17.45 |
| Class 4 (self-employed) | 9% on profits between £12,570 and £50,270 plus 2% on profits over £50,270 |
Value Added Tax
| Standard rate | 20% |
| Reduced rate | 5% |
| Annual Registration Limit – from 1.4.21 (1.4.20 – 31.3.21 £81,000) | £85,000 |
| Annual Deregistration Limit – from 1.4.21 (1.4.20 – 31.3.21 £79,000) | £85,000 |
Capital Allowances
Plant and machinery – Annual Investment Allowance (AIA)
The AIA gives a 100% write-off on most types of plant and machinery costs, including integral features and long life assets but not cars, of up to £1,000,000 p.a. for expenditure incurred on or after 1 January 2020.
Any costs over the AIA fall into the normal capital allowance pools below. The AIA may need to be shared between certain businesses under common ownership.
Other plant and machinery allowances
The annual rate of allowance is 18%. An 8% rate applies to expenditure incurred on integral features and on long life assets.
A 100% first year allowance may be available on certain energy efficient plant and cars, including expenditure incurred on new and unused zero emission goods vehicles.
Cars
To get more information about AIA for business cars, please refer to the UK government thanks to the following links: www.gov.uk/capital-allowances/business-cars