2017-18 Tax & National Insurance Rates

As we’ve passed the end of the 2017-18 Tax Year, we thought it would be appropriate to share the relevant Income Tax Rates that apply for the year ended 5th April 2018. These rates apply when preparing and calculating your Tax payable (or repayable) on your self assessment Tax return.

2017-18 Personal Tax Allowances & Bands

Allowance% of income / £ allowance p.a.
Basic Rate Tax20%
Higher Rate Tax40%
Additional Rate Tax45%
Dividend Basic Rate7.5%
Dividend Higher Rate32.5%
Dividend Additional Rate38.1%
Basic Rate Tax Band£0 – £33,500
Higher Rate Tax Band£33,500 – £150,000
Additional Rate Tax Band> £150,000

2017-18 UK Income Tax Rates

Personal Allowance£11,500
Limit for Personal Allowance£100,000 – Personal Allowance reduced by £1 for every £2 above this limit
Marriage Allowance£1,150
Limit for Married Couple’s Allowance£28,000 – Marriage Allowance reduced by £1 for every £2 above this limit
Blind Person’s Allowance£2,320
Dividend Allowance£5,000

2017-18 National Insurance Allowances

Band£ per week / annum
Lower Earnings Limit£113 p/w
Primary Threshold (PT)£157 p/w
Secondary Threshold (ST)£157 p/w
Upper Earnings Limit (LEL)£866
Upper Profits Limit (UPL)£45,000
Upper Secondary Threshold for Under 21s£866
Small Profits Threshold (SPT)£6,025
Lower Profits Limit (LPL)£8,164
Employment Allowance£3,000 per employer, per annum
Apprentice Upper Secondary Threshold (AUST) for U25s£866

2017-18 National Insurance Rates

Class 1 – Employee Rates

Earnings% of Income
Below LEL : £1130%
Between LEL and PT : £113 – £1570%
Between PT and UEL : £157 – £86612%
Above UEL : £8662%

Class 1 – Employer Rates

Earnings% of Income
Below ST : £1570%
Above ST : £15713.8%

2017-18 Self-Employed National Insurance Contribution Rates (Class 2 & 4 NIC)

Two types of National Insurance rates apply for those in self-employment or partnership. Class 2 NIC rate applies for any earnings over £6,025 per annum and is payable for each week. Class 4 applies to profits for the whole year and has it’s own brackets:

Band£ per week :: Class 4 NIC% of income
Below SPT : £6,025£0 :: 0%
Between SPT and LPL : £6,025 – £8,164£2.85 p/w :: 0%
Between LPL and UPL : £8,164 – £45,000£2.85 p/w :: 9%
Above £45,000£2.85 p/w :: 2%


2017-18 Corporation (Limited Company) Tax Rates

Corporation Tax rates are generally a lot lower than traditional self-employed UK Income Tax rates. That being said, recent changes to dividend Tax has made this a little more problematic. It maybe worth that you incorporate as a limited company but a detailed review of your Income Tax circumstances should be carried out whilst forecasting future activities.

That being said, Corporation Tax rates are set to be reduced to 17% by 2020.

For advice on this matter it is advised that you contact our sister company Edgemark Accounting for a free consultation to see how we can help your needs.

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