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)
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.
|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
|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.
|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 representatives||20%||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 relief||10%||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.