2018 Tax Code for Individuals

With the 2017 autumn budget come changes to the tax code, taking effect in April this year. For most individual tax payers, the changes were relatively uncontroversial, with all taxpayers enjoying a slight benefit due to increases in the personal allowance and the beginning of the additional rate (45%) tax bracket.

Below we set out the chief changes impacting personal tax in 2018.

Income Tax Rates (after deduction of Personal Allowance)

2017/182018/19
Basic (20%)£1-£33,500£1-£34,500
Higher (40%)£33,501-£150,000£34,501-£150,000
Additional (45%)£150,000+£150,000+

Allowances

2017/182018/19
Personal
Allowance
£11,500£11,850
Income Limit£100,000£100,000
Dividend
Allowance
£5,000 £2,000

In 2017, the Personal Allowances is still tapered by £1 for every £2 exceeding the £100,000 Income Limit. This means that in 2018, after a person earns £123,700 they don't receive any Personal Allowance.


National Insurance Contributions
Mild increases in the LEL, PT, and UEL will help earners save slightly on their annual NIC contributions.

2017/182018/19
Weekly lower earnings limit(LEL)£113/week£116/week
Weekly Primary Threshold (PT)£157/week£162/week
Weekly Secondary Threshold (ST)£157/week£162/week
Upper Earnings Limit (UEL)£866/week£892/week
Upper Secondary threshold for under 21s£866/week£892/week
Apprentice Upper Secondary Threshold (AUST) for under 25s£866/week£892/week
Employment Allowance (per employer) £3,000 per year£3,000 per year

Class 4 NIC: Self-Employed Rates and Thresholds

2017/182018/19
Small Profits Threshold (SPT) £6,025 per year£6,205 per year
Lower Profits Limit (LPL)£8,164/week£8,424/week
Upper Profits Limit (UPL) £45,000/week £46,350/week

Capital Gains Tax
Capital Gains taxes have remained constant, bar minor changes to the annual exempt amounts.

2017/182018/19
Main Rates for individuals 10% / 20%10% / 20%
Rates for individuals (for gains on redidential property not eligible for Private Residence Relief, and carried interest)18% / 28% 18% / 28%
Main rate for trustees and personal representatives20%20%
Annual Exempt Amount (AEA) for individuals and personal representatives £11,300£11,700
AEA for most trustees£5,650£5,850
Rate on gains subject to entrepreneurs' relief 10%10%
Rate on gains subject to investor's relief10%10%
Entrepreneurs' relief: lifetime limit on gains for entrepreneurs£10,000,000£10,000,000
Investor's Relief: lifetime limit on gains for external investors£10,000,000£10,000,000

Input your text here! The text element is intended for longform copy that could potentially include multiple paragraphs.For more information see https://www.gov.uk/government/publications/autumn-budget-2017-overview-of-tax-legislation-and-rates-ootlar/annex-a-rates-and-allowances

What this means for individuals

As the new tax year rolls in, basic and higher tax rate earners can expect a few extra pounds a month.

How we can help

At Optimum Office, we can help you keep track of your income and expenses and prepare your annual Self Assessment.

Keep your mind on your business and your passions, and let us ease the burden of Bookkeeping and Self Assessment

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