Rates and 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
rate
Lifetime
rate
Chargeable transfers
2020/21 and 2019/20
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