We have summarised the key rates and allowances which are fundamental to our business and personal lives. We are sure that you will find them a useful point of reference and have set out below a few examples of how they can be used.
The following information was updated following the 2024 Autumn Budget statement.
Hybrid cars are treated as either petrol or diesel cars for this purpose. The Advisory Electricity Rate for fully electric cars is 9p per mile. Electricity is not a fuel for car fuel benefit purposes.
*The 18/24% rates apply to disposals on/after 30th October 2024.
The higher rate applies to higher rate and additional rate taxpayers. Additionally, higher rates of 18% and 24% may apply to the disposal of certain residential property.
Child Benefit is receivable by a person responsible for each child until they reach 16, or 19 if they stay in education or training. If the person (or their spouse or partner) has ‘adjusted net income‘ above £60,000 the person with the highest income has to pay some of the Child Benefit as a tax charge. Where adjusted net income is more than £80,000 a year, the tax charge equals the Child Benefit received.
With the exception of Statutory Sick Pay, statutory payments may be payable at 90% average weekly earnings throughout the payment period in certain circumstances. This applies where 90% weekly earnings are less than the standard rate of £184.03.
A personal allowance gives an individual an annual amount of income free from income tax. Income above the personal allowances is subject to income tax. The personal allowance will be reduced if an individual’s ‘adjusted net income‘ is above £100,000. The allowance is reduced by £1 for every £2 of income above £100,000.
An individual born before 6 April 1935 may be entitled to a married couple’s allowance but this is reduced if ‘adjusted net income‘ is above the married couple’s allowance income limit (see table below). Marriage allowance – 10% of the personal allowance may be transferable between certain spouses where neither pays tax above the basic rate. The Marriage allowance is not available to couples entitled to the Married Couple’s allowance.
The income from ISA investments is exempt from income tax. Any capital gains made on investments held in an ISA are exempt from capital gains tax. Savers are able to subscribe any amounts into a cash ISA, a stocks and shares ISA or an innovative finance ISA subject to not exceeding the overall annual investment limit.
Investors may transfer their investments from one kind of ISA to another. The Lifetime ISA is available for those aged between 18 and 40. Save up to £4,000 each year up until the age of 50, and receive a government bonus of 25% (a bonus of up to £1,000 a year). Savers can use some or all of the money to buy their first home, or keep it until they are aged 60 when the account can be accessed tax free. Conditions apply to the account holder and property purchased.
Penalties apply if funds are withdrawn in other circumstances. A Help to Buy ISA provides a tax free savings account for first time buyers wishing to save for a home. The scheme provides a government bonus to each person who has saved into a Help to Buy ISA at the point they use their savings to purchase their first home.
For every £200 a first time buyer saves, the government will provide a £50 bonus up to a maximum bonus of £3,000 on £12,000 of savings. The bonus will be paid in the form of a voucher when the first home is purchased.
Conditions apply to the account holder and to the property purchased. Help to Buy ISAs closed to new savers on 30 November 2019. Existing holders can continue saving until 30 November 2029 and will have until 1 December 2030 to claim their bonus.
Land and Buildings Transaction Tax (LBTT) is payable on land and property transactions in Scotland.
The rates apply to the portion of the total value which falls within each band. Residential rates may be increased by 6% where further residential properties, costing over £40,000, are acquired. First-time Buyer relief raises the zero rate tax threshold for first-time buyers from £145,000 to £175,000.
The rates apply to the portion of the total value which falls within each band.
Land Transaction Tax (LTT) is payable on land and property transactions in Wales.
The rates apply to the portion of the total value which falls within each band. Residential rates may be increased where further residential properties costing over £40,000 or over are acquired.
Higher residential rates may apply when you already own one or more residential properties.
Entitlement to state pension and other contribution-based benefits is retained for earnings between £123 and £242 per week.
Class 1A – 13.8% on broadly all taxable benefits provided to employees and on certain taxable termination payments in excess of £30,000 Class 1B – 13.8% on taxable PAYE Settlement Agreements
A self-employed person with profits below the Small Profits Threshold might decide to carry on paying Class 2 voluntarily to accrue entitlement to the State Pension and other benefits.
Flat rate per week £17.45
Auto enrolment places duties on employers to automatically enrol ‘workers’ into a work based pension scheme. Employers are required to automatically enrol all ‘eligible jobholders’ into a qualifying pension scheme and pay pension contributions on their behalf.
Where the employer does not make the total minimum contribution the employee is obliged to pay the balance.
When you buy shares, you usually pay a tax or duty of 0.5% on the transaction. If you buy shares electronically Stamp Duty Reserve Tax (SDRT) is payable. For shares purchased using a stock transfer form, you will pay Stamp Duty if the transaction is over £1,000.
These rates may be increased by 3% where further residential properties, costing over £40,000, are acquired.
First-time buyers may be eligible for first-time buyer relief on purchases of residential property up to £625,000. The rates apply to the portion of the total value which falls within each band.
Payable on consideration which falls in each band.
The Enterprise Investment Scheme (EIS) provides tax relief for individuals prepared to invest in new and growing companies. Investors can obtain generous income tax and capital gains tax (CGT) breaks for their investment and companies can use the relief to attract additional investment to develop their business. Individuals are entitled to relief on investments in certain unquoted trading companies through EIS. A junior version of EIS the SEIS is also available.
Capital gains from the disposal of other assets may be deferred by making an EIS investment.
The Seed Enterprise Investment Scheme (SEIS) provides tax relief for individuals prepared to invest in new and growing companies. Investors can obtain generous income tax and capital gains tax (CGT) breaks for their investment and companies can use the relief to attract additional investment to develop their business. SEIS is a junior version of EIS.
An individual who makes a capital gain on another asset and uses the amount of the gain to make a SEIS investment will not pay tax on 50% of the gain (subject to certain conditions). Capital gains from the disposal of other assets may be exempt up to £100,000* per annum by making an SEIS investment.
*Limits subject to Parliamentary approval.
Social Investment Relief (SIR) was designed to encourage private individuals to invest in social enterprises including charities. SIR closed to any new investments from 6 April 2023.
Venture Capital Trusts (VCTs) are designed to encourage private individuals to invest in smaller high-risk unquoted trading companies. VCTs operate by indirect investment through a mediated fund. In effect they are very like the investment trusts that are obtainable on the stock exchange, albeit in a high-risk environment. Individuals are entitled to relief on investments in VCTs.
Businesses must use these new VAT fuel scale charges from the start of their next prescribed accounting period beginning on or after 1 May 2023.
Where the CO2 emission figure is not a multiple of five, the figure is rounded down to the next multiple of five to determine the level of the charge. For a bi-fuel vehicle which has two CO2 emissions figures, the lower of the two figures should be used. For cars which are too old to have a CO2 emissions figure, you should identify the CO2 band based on engine size. If its cylinder capacity is:
For vehicles first registered on or after 1 April 2017, the VED or ‘Road Tax’ rate for the first 12 months is based on CO2 emissions shown on the V5 (Registration Document). Subsequent years are charged at the standard rate. Cars with a list price of over £40,000 when new pay an additional rate of £390 per year on top of the standard rate, for five years. New diesel vehicles that do not meet the Euro 6d emissions standard are charged a supplement on their First Year Rate to the effect of moving up by one VED band.
*Including cars emitting over 225g/km registered before 23 March 2006.
