National Insurance Contributions


 

Employer

Employee

Class 1 (not contracted out)

Weekly earnings

Lower earnings limit - up to 113.00

N/A

N/A

Earnings threshold - employer - 157.00

N/A

N/A

Earnings threshold - employee - 157.00

N/A

N/A

Upper earnings limit - 157.01 - 866.00

13.8%

12%

Over 866.00

13.8%

2%

Over state retirement age

13.8%

nil

Employment allowance

3,000

N/A

Class 1A - On relevant benefits

13.8%

nil


Class 2 - Self employed

2.85 per week

Small profits threshold

6,025 pa


Class 3 - Voluntary

14.25 per week


Class 4 - Self employed on profits

Up to 8,164

nil

8,164 - 45,000

9%

Over 45,000

2%


Exemption from class 4 applies if state retirement age is reached by 6 April 2017.

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Corporation Tax


Financial Year to

31 March 2018

31 March 2017

Taxable Profits

From zero upwards

19%

20%



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Capital Allowances



Annual investment allowance (AIA)

The first 200,000 of qualifying expenditure is eligible for the AIA. In effect the first 200,000 of such expenditure ranks for tax relief in full in the year in which it is incurred. Transitional rules apply whenever there is a change in the limit.

Qualifying expenditure includes expenditure on plant and machinery and fixtures and integral features.

Businesses can allocate their AIA in any way they wish; so it is acceptable, for example, to allocate the allowance against expenditure qualifying for a low rate of allowance.


Plant and machinery and fixtures

Any expenditure on plant and machinery and fixtures not covered by the AIA (see above) is eligible for a writing down allowance (WDA). The rate of WDA is 18%.

Energy-saving and environmentally friendly plant or machinery

Expenditure on energy-saving or environmentally friendly plant or machinery is eligible for a first year allowance (FYA). The rate of FYA is 100%.

Where companies (only) have unrelieved losses attributable to expenditure on energy-saving or environmentally friendly plant or machinery they may surrender those losses for a cash payment. The company receives a tax credit of 19%, subject to a maximum of the greater of 250,000 or the company's PAYE and NI liabilities for the period for which the loss is surrendered. The credit is clawed back where the asset is sold within four years after the end of the period for which the credit was paid.


Integral features

Any expenditure on integral features not covered by the AIA is allocated to the special rate pool where it is eligible for a writing down allowance (WDA). The rate of WDA is 8%.

Integral features of a building are electrical systems (including lighting systems), cold water systems, space or water heating systems, powered ventilation systems, air cooling or purification and any floor or ceiling incorporated in such systems, lifts, escalators and moving walkways and external solar shading.


Low emission cars

Expenditure on low emission cars is eligible for a first year allowance (FYA). The rate of FYA is 100%.

This allowance is given on new cars which are either electrically propelled or emit not more than 75g/km of carbon dioxide.


Motor cars

Expenditure on cars which emit up to 130g/km of carbon dioxide is allocated to the main pool where it is eligible for a writing down allowance (WDA). The rate of WDA is 18%.

Expenditure on cars which emit over 130g/km of carbon dioxide is allocated to the special rate pool where it is eligible for a writing down allowance (WDA). The rate of WDA is 8%.


Main pool and special rate pool

A WDA of up to 1,000 can be claimed where the unrelieved expenditure in either the 8% or 18% pool is 1,000 or less.


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Value Added Tax


From

1 April 2017

1 April 2016

Standard Rate

20%

20%

VAT Fraction

1/6th

1/6th

Taxable Turnover Limits

Registration - last 12 months or coming 30 days over

85,000

83,000

Deregistration - coming year under

83,000

81,000

Cash accounting scheme - up to

1,350,000

1,350,000

Annual accounting scheme - up to

1,350,000

1,350,000

Optional flat rate scheme - up to

150,000

150,000



VAT on fuel for private use in cars
Where businesses buy fuel which has some degree of private use, they must account for output VAT on a scale charge. This is based on the CO2 emissions of the vehicle (rounded down to the next multiple of 5). The VAT chargeable for quarters commencing on or after 1 May 2017 is as follows:

CO2 in grams per kilometer

VAT exclusive consideration for a three month period - Box 6

VAT for a three month period - Box 1

120 or less

116.67

23.33

125

175.83

35.17

130

186.67

37.33

135

198.33

39.67

140

210.00

42.00

145

222.50

44.50

150

234.17

46.93

155

245.83

49.17

160

257.10

51.50

165

269.17

53.83

170

280.83

56.17

175

292.50

58.50

180

304.17

60.83

185

315.83

63.17

190

327.50

65.50

195

340.00

68.00

200

351.67

70.33

205

363.33

72.67

210

374.17

74.83

215

385.83

77.17

220

398.33

79.67

225 or more

410.00

82.00



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Capital Gains Tax


2017/18

2016/17

Gains eligible for entrepreneurs' relief

10%

10%

Gains on the disposal of interests in residential property

18% / 28%

18% / 28%

Gains on the disposal of other assets

10% / 20%

10% / 20%

Lifetime limit of gains eligible for entrepreneurs' relief

10 million

10 million

Annual exemption

11,300

11,100

Annual exemption for most trustees

5,650

5,550

Chattel exemption - proceeds

6,000

6,000


Transfers between husband and wife living together are exempt.

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Inheritance Tax


2017/18

2016/17

Nil rate band

325,000

325,000

Rate of tax on balance :

Chargeable lifetime transfers

20%

20%

Transfers on, or within seven years of death

40%

40%


The nil rate band is frozen until April 2021.

On 6 April 2017 there is introduced a 'residential enhancement' to the nil rate band. The enhancement is available against the value of the home where the home is left to the children of the deceased. An extra enhancement can be claimed where the deceased was widowed before 6 April 2017. The enhancement is 100,000 for 2017-18, rising by 25,000 each year and reaching 175,000 in the year 2020-21.

The nil rate band is applied first against transfers made within seven years of death. All lifetime transfers not covered by exemptions or by the nil rate band and made within seven years of death are added back into the estate for the purposes of calculating the amount of tax payable. The rate of tax applying to these lifetime gifts, 40%, is progressively reduced the longer the period of survival after the making of the gift, as illustrated in the following table.

Charge on gifts made 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%



Main Exemptions

2017/18

Transfers between UK domiciled husband and wife

Exempt

Annual exemption - the first part of lifetime transfers in any tax year

3,000

Small gifts exemption - gifts of up to but not exceeding this amount to any number of persons

250 per annum

Gifts out of income - gifts made out of income that from part of normal expenditure and do not reduce the donor's standard of living

No limit

Gifts in consideration of marriage - gifts to bride and / or groom as follows

Parent

Up to 5,000

Grandparent

Up to 2,500

Any other person

Up to 1,000

Gifts to charities - whether during lifetime or on death

No limit



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Key Dates and Deadlines


Income Tax and Class 4 National Insurance

2017/18

2016/17

First payment on account

31 January

2018

2017

Second payment on account

31 July

2018

2017

Balancing payment

31 January

2019

2018


Capital Gains Tax

31 January

2019

2018


Corporation Tax

Nine months after the end of the accounting period


Latest Filing Dates

2016/17 Returns

Self Assessment Tax Returns

31 January 2018


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