Income Tax Rates
| ALLOWANCES | 2023/24 | 2022/23 |
|---|---|---|
| Personal Allowance (PA) * | £12,570 | £12,570 |
| Marriage Allowance + | £1,260 | £1,260 |
| Blind Person's Allowance | £2,870 | £2,600 |
| Rent a Room Relief ** | £7,500 | £7,500 |
| Trading Income ** | £1,000 | £1,000 |
| Property Income ** | £1,000 | £1,000 |
*PA is withdrawn at £1 for every £2 by which ‘adjusted income’ exceeds £100,000. There is no allowance given above £125,140.
+The part of the PA that is transferable to a spouse or civil partner who is not a higher or additional rate tax payer.
** If the gross income exceeds this, the limit may be deducted instead of actual expenses.
| RATE BANDS | 2023/24 | 2022/23 |
|---|---|---|
| Basic Rate Band (BRB) | £37,700 | £37,700 |
| Higher Rate Band (HRB) | £37,701-£125,140 | £37,701-£150,000 |
| Additional Rate | over £125,140 | over £150,000 |
| Personal Savings Allowance (PSA) | ||
| - Basic Rate Taxpayer | £1,000 | £1,000 |
| - Higher Rate Taxpayer | £500 | £500 |
| Dividend Allowance (DA) | £1,000 | £2,000 |
BRB and additional rate threshold are increased by personal pension contributions (up to permitted limit) and Gift Aid donations.
| TAX RATES | 2023/24 | 2022/23 | ||||
|---|---|---|---|---|---|---|
| Rates differ for General/Savings/Dividend income | G | S | D | G | S | D |
| Basic Rate | 20% | 20% | 8.75% | 20% | 20% | 8.75% |
| Higher Rate | 40% | 40% | 33.75% | 40% | 40% | 33.75% |
| Additional Rate | 45% | 45% | 39.35% | 45% | 45% | 39.35% |
General income (salary, pensions, business profits, rent) usually uses personal allowance, basic rate and higher rate bands before savings income (mainly interest). Scottish taxpayers are taxed at different rates on general income (see below).
To the extent that savings income falls in the first £5,000 of the basic rate band, it is taxed at nil rather than 20%.
The PSA taxes interest at nil, where it would otherwise be taxable at 20% or 40%.
Dividends are normally taxed as the ‘top slice’ of income. The DA taxes the first £1,000 of dividend income at nil, rather than the rate that would otherwise apply.
| INCOME TAX - SCOTLAND | 2023/24 | 2022/23 | ||
|---|---|---|---|---|
| Starter Rate | 19% | (19%) | £2,162 | £2,162 |
| Basic Rate | 20% | (20%) | £2,163-£13,118 | £2,163-£13,118 |
| Intermediate Rate | 21% | (21%) | £13,119-£31,092 | £13,119-£31,092 |
| Higher Rate | 42% | (41%) | £31,093-£125,140 | £31,093-£150,000 |
| Top Rate | 47% | (46%) | over £125,140 | over £150,000 |
The Scottish rates and bands do not apply for savings and dividend income, which are taxed at normal UK rates.
High Income Child Benefit Charge (HICBC)
1% of child benefit for each £100 of adjusted net income between £50,000 and £60,000.
| REMITTANCE BASIS CHARGE | 2023/24 | 2022/23 |
|---|---|---|
| For non-UK domiciled individuals who have been UK resident at least: | ||
| 7 of the preceding 9 tax years | £30,000 | £30,000 |
| 12 of the preceding 14 tax years | £60,000 | £60,000 |
| 15 of the preceding 20 tax years | Deemed to be UK domiciled | |
Pensions
| REGISTERED PENSIONS | 2022/23 | 2021/22 |
|---|---|---|
| Lifetime Allowance (LA) | £1,073,100 | £1,073,100 |
| Annual Allowance (AA)* | £40,000 | £40,000 |
Annual relievable pension inputs are the higher of earnings (capped at AA) or £3,600.
* Usually tapered down, to a minimum of £10,000 (2022/23: £4,000), when adjusted income exceeds £260,000 (2022/23: £240,000).
In 2023/24 there is no LTA charge on excess pension savings. The maximum tax-free pension lump sum is £268,275 (25% of LTA), unless a higher amount is ‘protected’.
| STATE PENSION (PER WEEK) | 2023/24 | 2022/23 |
|---|---|---|
| Old state pension - single person | £156.20 | £141.85 |
| New state pension + | £203.85 | £185.15 |
+ Applies to those reaching state retirement age after 5 April 2016.
Annual Investment Limits
| INDIVIDUAL SAVINGS ACCOUNT (ISA) | 2023/24 | 2022/23 |
|---|---|---|
| Overall Limit | £20,000 | £20,000 |
| Lifetime ISA | £4,000 | £4,000 |
| Junior ISA | £9,000 | £9,000 |
| EIS - 30% relief | £2,000,000 | £2,000,000 |
| Seed EIS (SEIS) - 50% relief | £200,000 | £100,000 |
| Venture Capital Trust (VCT) - 30% relief | £200,000 | £200,000 |
National Insurance Contributions
| CLASS 1 (EMPLOYEES) | EMPLOYEE | EMPLOYER |
|---|---|---|
| Main NIC rate | 12% | 13.8% |
| From 6.11.2022: No NIC on first | £242 pw | £175 pw |
| Main rate charged up to* | £967 pw | no limit |
| 2% rate on earnings above | £967 pw | N/A |
| Employment allowance per business** | N/A | £5,000 |
*Nil rate of employer NIC on earnings up to £967 per week for employees aged under 21, apprentices aged under 25 and ex-armed forces personnel in their first twelve months of civilian employment.
** Some businesses do not qualify, including certain sole director companies and employers who have an employer’s Class 1 NIC liability of £100,000 or more for 2022/23.
Employer contributions (at 13.8%) are also due on most taxable benefits (Class 1A) and on tax paid on an employee’s behalf under a PAYE settlement agreement (Class 1B).
| CLASS 2 (SELF EMPLOYED) | |
|---|---|
| Flat rate per week if profits above £12,570 | £3.45 |
| CLASS 3 (VOLUNTARY) | |
|---|---|
| Class 3: Flat rate per week | £17.45 |
| CLASS 4 (SELF EMPLOYED) | |
|---|---|
| On profits £12,570 - £50,270 | 9% |
| On profits over £50,270 | 2% |
Employees with earnings above £123 pw and the self-employed with profits over £6,725 access entitlement to contributory benefits.
Vehicle Benefits
CARS
Taxable benefit: List price of car multiplied by chargeable percentage.
| CO2 G/KM | ELECTRIC RANGE MILES | 2023/24 & 2022/23 % |
|---|---|---|
| 0 | N/A | 2 |
| 1-50 | >130 | 2 |
| 1-50 | 70 - 129 | 5 |
| 1-50 | 40 - 69 | 8 |
| 1-50 | 30 - 39 | 12 |
| 1-50 | <30 | 14 |
| 51-54 | N/A | 15 |
Then a further 1% for each 5g/km CO2 emissions, up to a maximum of 37%. Diesel cars that are not RDE2 standard suffer a 4% supplement on the above figures but are still capped at 37%.
VANS
Chargeable value of £3,960 (2022/23: £3,600) if private use is more than home-to-work. Zero-emission vans charged at £Nil (2022/23: £Nil).
FUEL
Employer provides fuel for private motoring in an employer-owned:
Car: CO2-based percentage from above table multiplied by £27,800 (2022/23: £25,300).
Van: £757 (2022/23: £688)
Employee contributions do not reduce taxable figure unless all private fuel is paid for by employee (in which case there is no benefit charge).
Tax Free Mileage Allowances
| EMPLOYEE'S OWN TRANSPORT | PER BUSINESS MILE |
|---|---|
| Cars first 10,000 miles | 45p |
| Cars over 10,000 miles | 25p |
| Business passengers | 5p |
| Motorcycles | 24p |
| Bicycles | 20p |
Capital Gains Tax
| 2023/24 | 2022/23 | |
|---|---|---|
| ANNUAL EXEMPTION AMOUNT | ||
| Individuals, estates | £6,000 | £12,300 |
| Most trusts | £3,000 | £6,150 |
| TAX RATE | ||
| Individual (to basic rate limit)* | 10% | 10% |
| Individual (above basic rate limit)* | 20% | 20% |
| Trusts, estates* | 20% | 20% |
| Business Asset Disposal Relief (BADR)** | 10% | 10% |
*Individuals are taxed at 18%/28% on gains on residential property and receipts of carried interest. Trusts and estates are taxed at 28% in these circumstances.
**BADR is available on qualifying gains of up to a lifetime limit of £1m.
Corporation Tax
| YEAR TO | 31.3.2024 | 31.3.2023 |
|---|---|---|
| Main rate (all profits) | N/A | 19% |
| Main rate (profits above £250,000) | 25% | N/A |
| Small profits rate (profits up to £50,000) | 19% | N/A |
| Marginal relief band (MRB) | £50k-£250k | N/A |
| Fraction in MRB (effective marginal rate) | 3/200 (26.5%) | N/A |
| RESEARCH AND DEVELOPMENT RELIEF | 31.3.2024 | 31.3.2023 |
|---|---|---|
| SME enhanced expediture deduction scheme* | 86% | 130% |
| Large company R&D Expenditure Credit (RDEC) scheme** | 20% | 13% |
*Additional deduction for qualifying R&D.
**Taxable expenditure credit for qualifying R&D.
SMEs that make losses can surrender any R&D loss to HMRC in exchange for a payment of 10% (year to 31.3.23: 14.5%) of the loss (capped at £20,000 plus 3 x PAYE & NIC).
Qualifying loss-making companies where R&D expenditure constitutes at least 40% of total expenditure are able to claim a payable credit rate of 14.5% from 1 April 2023.
Main Capital Allowances
| PLANT AND MACHINERY ALLOWANCES | ||
|---|---|---|
| Year to 31.3.24 | Year to 31.3.23 | |
| Companies only | ||
| - First-year allowance (main pool) | 100% | N/A |
| - Super-deduction )main pool) | N/A | 130% |
| - First-year allowance (special rate pool) | 50% | 50% |
| Annual Investment Allowance (AIA) | ||
| - Expenditure of up to £1m | 100% | 100% |
| New electric vans | 100% | 100% |
| Writing down allowance: main pool | 18% | 18% |
| Writing down allowance: special rate pool | 6% | 6% |
| MOTOR CARS PURCHASED | ||
|---|---|---|
| From 1.4.21 | Allowance | |
| CO2 (g/km) | ||
| New cars only | Nil | 100% |
| In general pool | up to 50 | 18% |
| In special rate pool | above 50 | 6% |
| STRUCTURES AND BUILDINGS ALLOWANCE | |
|---|---|
| Fixed deduction per annum | 3% |
Property Taxes
Annual Tax on Enveloped Dwellings (ATED)
ATED applies to ‘high value’ residential properties owned via a corporate structure, unless the property is used for a qualifying purpose. The tax applies to properties valued at more than £500,000.
| PROPERTY VALUE | ANNUAL CHARGE TO | |
|---|---|---|
| 31.3.2024 | 31.3.2023 | |
| £0.5m - £1m | £4,150 | £3,800 |
| £1m - £2m | £8,450 | £7,700 |
| £2m - £5m | £28,650 | £26,050 |
| £5m - £10m | £67,050 | £60,900 |
| £10m - £20m | £134,550 | £122,250 |
| Over £20m | £269,450 | £244,750 |
Stamp Duty Land Tax (SDLT), Land and Buildings Transaction Tax (LBTT) and Land Transaction Tax (LTT)
| RESIDENTIAL PROPERTY (FIRST PROPERTY ONLY) | |||||
|---|---|---|---|---|---|
| SDLT - ENGLAND & NI £000 | RATE | LBTT - SCOTLAND £000 | RATE | LTT - WALES £000 | RATE |
| Up to 250 | Nil | Up to 145 | Nil | Up to 225 | Nil |
| 250 - 925 | 5% | 145 - 250 | 2% | 225 - 400 | 6% |
| 925 - 1,500 | 10% | 250 - 325 | 5% | 400 - 750 | 7.5% |
| Over 1,500 | 12% | 325 - 750 | 10% | 750 - 1,500 | 10% |
| Over 750 | 12% | Over 1,500 | 12% | ||
A supplement applies for all three taxes where an additional residential property interest is purchased for more than £40,000 (unless replacing a main residence). It is also payable by all corporate purchasers. The rate is 3% (SDLT) and 6% (LBTT) of the total purchase price. LTT has specific higher rates in bandings: up to 180k: 4%, 180 - 250k: 7.5%, 250 - 400k: 9%, 400 - 750k: 11.5%, 750 - 1,500k: 14%, >1,500k: 16%.
For SDLT:
– First-time buyers purchasing a property of up to £625,000 pay a nil rate on the first £425,000 of the purchase price.
– A 2% supplement applies where the property is bought by certain non-UK residents.
– A rate of 15% may apply to the total purchase price, where the property is valued above £500,000 and purchased by a ‘non-natural person’ (e.g. a company).
For LBTT, first-time buyer relief increases the nil rate band to £175,000.
| NON-RESIDENTIAL OR MIXED USE PROPERTY | |||||
|---|---|---|---|---|---|
| SDLT - ENGLAND & NI £000 | RATE | LBTT - SCOTLAND £000 | RATE | LTT - WALES £000 | RATE |
| Up to 150 | Nil | Up to 150 | Nil | Up to 225 | Nil |
| 150 - 250 | 2% | 150- 250 | 1% | 225 - 250 | 1% |
| Over 250 | 5% | Over 250 | 5% | 250 - 1,000 | 5% |
| Over 1,000 | 6% | ||||
Value Added Tax
| Rate | |
|---|---|
| Standard rate (1/6 of VAT-inclusive price) | 20% |
| Registration level - Taxable turnover | £85,000 per annum |
| Deregistration level - Taxable turnover | £83,000 per annum |
| FLAT RATE SCHEME | |
|---|---|
| Annual taxable turnover to enter scheme | Up to £150,000 |
| Must leave scheme if annual gross turnover | Exceeds £230,000 |
If using FRS, the VAT paid by the business is a fixed percentage (based on business category) of ‘FRS turnover’ rather than the net of output tax over input tax. Input tax is usually not recoverable.
| CASH ACCOUNTING AND ANNUAL ACCOUNTING SCHEMES | |
|---|---|
| Annual taxable turnover to enter scheme | Up to £1.35m |
| Must leave scheme if annual taxable turnover | Exceeds £1.6m |
Inheritance Tax
| 2023/24 | 2022/23 | |
|---|---|---|
| Nil rate band (NRB) * | £325,000 | £325,000 |
| NRB Residential enhancement (RNRB) +* | £175,000 | £175,000 |
| Tax rate on death ** | 40% | 40% |
| Tax rate on lifetime transfers to most trusts | 20% | 20% |
*Up to 100% of the proportion of a deceased spouse’s/civil partner’s unused NRB and RNRB band may be claimed to increment the current NRB and RNRB when the survivor dies.
†RNRB is available for transfers of a main residence to (broadly) direct descendants. It tapers away at the rate of £1 for every £2 of estate value above £2m.
**Rate reduced to 36% if at least 10% of the relevant estate is left to charity. Unlimited exemption for transfers between spouses/civil partners, except if UK domiciled transferor and foreign domiciled transferee, where maximum exemption £325,000.
100% Business Property Relief (BPR) for all shareholdings in qualifying unquoted trading companies, qualifying unincorporated trading businesses and certain farmland/buildings.
| REDUCED TAX CHARGE ON GIFTS WITHIN 7 YEARS BEFORE DEATH | |||||
|---|---|---|---|---|---|
| Years before death | 0-3 | 3-4 | 4-5 | 5-6 | 6-7 |
| % of full death tax charge payable | 100 | 80 | 60 | 40 | 20 |
Annual exemptions for lifetime gifts include £3,000 per donor and £250 per recipient.
Key Dates and Deadlines
Payment Dates
| SELF ASSESSMENT | 2023/24 | 2022/23 | |
|---|---|---|---|
| First payment on account | 31 January | 2024 | 2023 |
| Second payment on account | 31 July | 2024 | 2023 |
| Balancing payment | 31 January | 2025 | 2024 |
| Capital Gains Tax * | 31 January | 2025 | 2024 |
| OTHER PAYMENT DATES | |||
|---|---|---|---|
| Class 1A NIC | 19 July | 2024 | 2023 |
| Class 1B NIC | 19 October | 2024 | 2023 |
Corporation tax is due 9 months and 1 day from the end of the accounting period, unless a ‘large’ company paying by quarterly instalments.
| 2022/23 FILING DEADLINES | |
|---|---|
| Issue P60s to employees | 31 May 2023 |
| P11D, P11D(b) | 6 July 2023 |
| Self Assessment Tax Return (SATR) paper version | 31 October 2023 |
| Online SATR if outstanding tax to be included in 2024/25 PAYE code (if under £3,000) | 30 December 2023 |
| Online SATR | 31 January 2024 |
*A CGT return is due within 60 days of completion of sale of any UK land and buildings by a non-resident and of sale of UK residential property with a tax liability by a UK resident. Any CGT payment is also due within 60 days.
Useful Rates
| NATIONAL MINIMUM WAGE RATES PER HOUR | FROM 1.04.23 | FROM 1.04.22 |
|---|---|---|
| Aged 23 and over (National Living Wage) | £10.42 | £9.50 |
| Aged 21 - 22 | £10.18 | £9.18 |
| Aged 18 - 20 | £7.49 | £6.83 |
| Aged 16 - 17 | £5.28 | £4.81 |
| Apprentices | £5.28 | £4.81 |
You are advised to consult us before acting on any information contained herein.