The Autumn Budget 2017 changes are summarised in HMRC's: Autumn 2017 Budget, especially Autumn 2017 Tax Rates and Allowances
Here are some notes on what the UK budget of March 2017 will bring with previous rates given for reference:
Personal allowances
2011-12 £7,475.
2012-13 £8,105.
2013-14 £9,440.
2014-15 £10,000.
2015-16 £10,600
2016-17 £11,000
2017-18 £11,500 (remains same as announced in 2016)
2018-19 £11,850 (Autumn budget 2017)
Personal Allowance goes down by £1 for every £2 that adjusted net income is above £100,000.
The married couples allowance is £1150 for 2017-18 and £1185 for 2018-19.
Tax Bands
Basic rate bands (income at which higher rate starts)
2012-2013 £34,370 (+£8105=£42,475)
2013-2014 £32,010 (+£9440=£41,450)
2014-2015 £31,865 (+£10000=£41,865)
2015-2016 £31,785 (+£10600 = £42,385)
2016-2017 £32,000 (+£11000 = £43,000)
2017-2018 £33,500 (+£11500 = £45,000) (same as announced in 2016)
2018-2019 £34,500 (+£11,850 = £46,350)
The basic rate of tax on income is 20% and above the basic rate band income is taxed at the higher rate of 40% until taxable income reaches £150,000. As an example, income earned between 6th April 2017 and 5th April 2018 is taxed at 20% between £11,500 and £45,000 and at 40% if it exceeds £45,000 and is less than £150,000. (There is no personal allowance for additional rate taxpayers (see "personal allowances" above).
The additional rate of 50% started at £150,000 of taxable income in 2012-2013, from 2013-2014 onwards there was supposed to be no additional rate, but the government has slipped in 45% tax on any taxable income over £150,000 for 2013-14, 2014-15, 2015-16, 2016-2017, 2017-2018. Notice that by not indexing this threshold 45% tax is being paid by ever more taxpayers.
click here to see the whole POLITICAL THOUGHTS magazine!
Dividends and Savings
After April 2016 there was a £5000 allowance for dividend income, now reduced to £2000 for the tax year 2018-19. Above £2000 of dividends the dividend tax rates are 7.5% for basic rate taxpayers, 32.5% for higher rate taxpayers and 38.1% for additional rate taxpayers.
There is a special savings tax rate for savings interest for low earners. If your income plus savings is less than £16,500 you pay no tax on savings. Where the savings push the total income over £16,500 the savings income is treated as ordinary income and taxed at basic rate.
There is also a personal savings allowance for savings interest that depends on the tax band occupied by the savings income:
Income Tax band Tax-free savings income
Basic rate £1,000
Higher rate £500
Additional rate £0
(These tax free amounts are current and extend to 2018-19)
Benefits
Trivial benefits in kind of £50 max per benefit and £300 total for office holders of Close Companies will not be taxed as from 6th April 2015. Employers will be able to provide tools of trade, professional subscriptions and other personally allowable benefits tax free from 6th April 2016.
National Insurance from April 2017:
Self Employed - pay both Class 2 and Class 4:
Class 2: if your profits are over £6,025 a year, £2.85 per week. Abolished from April 2018.
Class 4: if your profits are over £8,164 they are taxed at 9% up to £45000 then at 2% on further profits. (from April 2018 the figures are £8,424 and £46,350 respectively with the same rates of tax)
Employed:
Class 1 National Insurance for ordinary taxpayers is:
Earnings between £157 to £866 a week (£8164 to £45032 pa): 12%
Earnings over £866 a week (£45,032): 2%
From April 2018 the rates are the same but the thresholds are £162 and £892 (£8,424 and £46,384 pa)
There is also a "hidden" charge of 13.8% on all income over £8164 (2018-19: £8,424). This is called "Employers NIC" although it is a tax on each worker.
National Insurance is the principal tax for lower wage earners and, because journalists do not understand that it is just another tax, it is swingeing. Look at your monthly payslip, total National Insurance (yours and your "employers" - ie: yours but labelled differently) is 25.8% on earnings over about £8164 a year, including employer's contributions. Ordinary British wage earners are paying 20% income tax and 25.8% National Insurance, or 45.8% tax in total!
POLITICAL THOUGHTS click here to see the whole POLITICAL THOUGHTS magazine!
Inheritance Tax
The inheritance tax threshold will be increased by means of an allowance for direct descendants. The allowance will be up to £100,000 in 2017-18, up to £125,000 in 2018-19, up to £150,000 in 2019-20, and up to £175,000 in 2020-21. This is in addition to the inheritance tax nil-rate band, which is set at £325,000 for the estates of individuals. This creates an effective £500,000 inheritance tax threshold for estates in 2020-21. (Effectively £1m for married couples)
Self-employed National Insurance rates - historical data:
Class 4 National insurance 2014-15: 9% from £7956 - £41865, 2% above £41865
Class 4 National insurance 2015-16: 9% from £8060 - £42385, 2% above £42385
Business
Small profits rate of corporation tax is 20% for 1st April 2012-2016.
Main rate of corporation tax 24% for 1st April 2012, 23% 1st April 2013 and 21% from 1st April 2014 and 20% from 1st April 2015 onwards. From 1st April 2017, 2018, and 2019 it is 19% and from 1st April 2020 it will be 18%.
VAT
VAT Threshold is:
£79000 from 1st April 2013
£81,000 from 1st April 2014
£82,000 from 1st April 2015
£85,000 from 1st April 2017.
£85,000 from 1st April 2018
Pensions
The new right to withdraw money from pension funds is not a positive development. Those who withdraw money will pay tax at their marginal rate on the amount withdrawn. This means that only those who are in financial trouble are likely to withdraw their cash and the government will be levying extra tax from their misery. Furthermore this measure may destabilise retirement annuity providers so that those who thought they had a secure pension are at risk of losing it. As of 6th April 2016 the maximum lifetime pension contribution is set at £1,000,000, amended to £1,030,000 for 2018-19 .
Better news for the country
The budget deficit is steadily falling but until it reaches zero the National Debt will continue to increase.
Labour was borrowing crazily when they should have been saving. The total debt is levelling off:
It is only when politicians provide a regulated market that allows the continuous creation of independent new businesses and the abundance of employment that people can have freedom.
POLITICAL THOUGHTS click here to see the whole POLITICAL THOUGHTS magazine!
This article is updated annually.
See also:
What sort of public spending might stimulate the economy?
Economic policies for recovery
Sydenham's Law of public expenditure and economic growth.
Is Labour right?
Public spending and GDP
Does public money stimulate the economy?
The Way Forward
The rebirth of British manufacturing - how to do it
A New Taxation System
How to stimulate the UK economy
Is Labour any more than the Public Sector Party?
Here are some notes on what the UK budget of March 2017 will bring with previous rates given for reference:
Personal allowances
2011-12 £7,475.
2012-13 £8,105.
2013-14 £9,440.
2014-15 £10,000.
2015-16 £10,600
2016-17 £11,000
2017-18 £11,500 (remains same as announced in 2016)
2018-19 £11,850 (Autumn budget 2017)
Personal Allowance goes down by £1 for every £2 that adjusted net income is above £100,000.
The married couples allowance is £1150 for 2017-18 and £1185 for 2018-19.
Tax Bands
Basic rate bands (income at which higher rate starts)
2012-2013 £34,370 (+£8105=£42,475)
2013-2014 £32,010 (+£9440=£41,450)
2014-2015 £31,865 (+£10000=£41,865)
2015-2016 £31,785 (+£10600 = £42,385)
2016-2017 £32,000 (+£11000 = £43,000)
2017-2018 £33,500 (+£11500 = £45,000) (same as announced in 2016)
2018-2019 £34,500 (+£11,850 = £46,350)
The basic rate of tax on income is 20% and above the basic rate band income is taxed at the higher rate of 40% until taxable income reaches £150,000. As an example, income earned between 6th April 2017 and 5th April 2018 is taxed at 20% between £11,500 and £45,000 and at 40% if it exceeds £45,000 and is less than £150,000. (There is no personal allowance for additional rate taxpayers (see "personal allowances" above).
The additional rate of 50% started at £150,000 of taxable income in 2012-2013, from 2013-2014 onwards there was supposed to be no additional rate, but the government has slipped in 45% tax on any taxable income over £150,000 for 2013-14, 2014-15, 2015-16, 2016-2017, 2017-2018. Notice that by not indexing this threshold 45% tax is being paid by ever more taxpayers.
click here to see the whole POLITICAL THOUGHTS magazine!
Dividends and Savings
After April 2016 there was a £5000 allowance for dividend income, now reduced to £2000 for the tax year 2018-19. Above £2000 of dividends the dividend tax rates are 7.5% for basic rate taxpayers, 32.5% for higher rate taxpayers and 38.1% for additional rate taxpayers.
There is a special savings tax rate for savings interest for low earners. If your income plus savings is less than £16,500 you pay no tax on savings. Where the savings push the total income over £16,500 the savings income is treated as ordinary income and taxed at basic rate.
There is also a personal savings allowance for savings interest that depends on the tax band occupied by the savings income:
Income Tax band Tax-free savings income
Basic rate £1,000
Higher rate £500
Additional rate £0
(These tax free amounts are current and extend to 2018-19)
Benefits
Trivial benefits in kind of £50 max per benefit and £300 total for office holders of Close Companies will not be taxed as from 6th April 2015. Employers will be able to provide tools of trade, professional subscriptions and other personally allowable benefits tax free from 6th April 2016.
National Insurance from April 2017:
Self Employed - pay both Class 2 and Class 4:
Class 2: if your profits are over £6,025 a year, £2.85 per week. Abolished from April 2018.
Class 4: if your profits are over £8,164 they are taxed at 9% up to £45000 then at 2% on further profits. (from April 2018 the figures are £8,424 and £46,350 respectively with the same rates of tax)
Employed:
Class 1 National Insurance for ordinary taxpayers is:
Earnings between £157 to £866 a week (£8164 to £45032 pa): 12%
Earnings over £866 a week (£45,032): 2%
From April 2018 the rates are the same but the thresholds are £162 and £892 (£8,424 and £46,384 pa)
There is also a "hidden" charge of 13.8% on all income over £8164 (2018-19: £8,424). This is called "Employers NIC" although it is a tax on each worker.
National Insurance is the principal tax for lower wage earners and, because journalists do not understand that it is just another tax, it is swingeing. Look at your monthly payslip, total National Insurance (yours and your "employers" - ie: yours but labelled differently) is 25.8% on earnings over about £8164 a year, including employer's contributions. Ordinary British wage earners are paying 20% income tax and 25.8% National Insurance, or 45.8% tax in total!
POLITICAL THOUGHTS click here to see the whole POLITICAL THOUGHTS magazine!
Inheritance Tax
The inheritance tax threshold will be increased by means of an allowance for direct descendants. The allowance will be up to £100,000 in 2017-18, up to £125,000 in 2018-19, up to £150,000 in 2019-20, and up to £175,000 in 2020-21. This is in addition to the inheritance tax nil-rate band, which is set at £325,000 for the estates of individuals. This creates an effective £500,000 inheritance tax threshold for estates in 2020-21. (Effectively £1m for married couples)
Self-employed National Insurance rates - historical data:
Class 4 National insurance 2014-15: 9% from £7956 - £41865, 2% above £41865
Class 4 National insurance 2015-16: 9% from £8060 - £42385, 2% above £42385
Business
Small profits rate of corporation tax is 20% for 1st April 2012-2016.
Main rate of corporation tax 24% for 1st April 2012, 23% 1st April 2013 and 21% from 1st April 2014 and 20% from 1st April 2015 onwards. From 1st April 2017, 2018, and 2019 it is 19% and from 1st April 2020 it will be 18%.
VAT
VAT Threshold is:
£79000 from 1st April 2013
£81,000 from 1st April 2014
£82,000 from 1st April 2015
£85,000 from 1st April 2017.
£85,000 from 1st April 2018
Pensions
The new right to withdraw money from pension funds is not a positive development. Those who withdraw money will pay tax at their marginal rate on the amount withdrawn. This means that only those who are in financial trouble are likely to withdraw their cash and the government will be levying extra tax from their misery. Furthermore this measure may destabilise retirement annuity providers so that those who thought they had a secure pension are at risk of losing it. As of 6th April 2016 the maximum lifetime pension contribution is set at £1,000,000, amended to £1,030,000 for 2018-19 .
Better news for the country
Labour was borrowing crazily when they should have been saving. The total debt is levelling off:
POLITICAL THOUGHTS click here to see the whole POLITICAL THOUGHTS magazine!
This article is updated annually.
See also:
What sort of public spending might stimulate the economy?
Economic policies for recovery
Sydenham's Law of public expenditure and economic growth.
Is Labour right?
Public spending and GDP
Does public money stimulate the economy?
The Way Forward
The rebirth of British manufacturing - how to do it
A New Taxation System
How to stimulate the UK economy
Is Labour any more than the Public Sector Party?
Comments
Capital gains tax un UK | Property Tax Clause 24 in UK