As we approach the busiest time of year in the financial calendar, we provide a reminder of the key rates and thresholds applicable to those working in England and Northern Ireland.
Employee personal allowance | £240 per week £1,042 per month £12,500 per year |
Basic tax rate | 20% on annual earnings above the PAYE tax threshold and up to £37,500 |
Higher tax rate | 40% on annual earnings from £37.500 to £150,000 |
Additional tax rate | 45% on annual earnings above £150,000 |
The amount of gross income you can have before your personal allowance is reduced.
Income Limit (Born after 5 April 1948) | £100,000 |
Income Limit (Born before 6 April 1948) * | £29,600 |
You can only make National Insurance deductions on earnings above the Lower Earnings Limit (LEL).
LEL | £118 per week |
Primary Threshold (PT) | £166 per week |
Secondary Threshold (ST) | £166 per week |
Upper Secondary Threshold (under 21) (UST) | £962 per week |
Apprentice Upper Secondary Threshold (apprentice under 25) (AUST) | £962 per week |
Upper Earnings Limit (UEL) | £962 per week |
These are deducted from an employee’s pay via PAYE.
National Insurance category letter | Earnings at or above LEL up to and including PT | Earnings above the PT up to and including UEL | Balance of earnings above UEL |
A | 0% | 12% | 2% |
B | 0% | 5.85% | 2% |
C | nil | nil | nil |
H (Apprentice under 25) | 0% | 12% | 2% |
J | 0% | 2% | 2% |
M (under 21) | 0% | 12% | 2% |
Z (under 21 – deferment) | 0% | 2% | 2% |
Paid to HMRC as part of your PAYE bill.
National Insurance category letter | Earnings at or above LEL up to and including ST | Earnings above ST up to and including UEL/UST/AUST | Balance of earnings above UEL/UST/AUST |
A | 0% | 13.80% | 13.80% |
B | 0% | 13.80% | 13.80% |
C | 0% | 13.80% | 13.80% |
H (Apprentice under 25) | 0% | 0% | 13.80% |
J | 0% | 13.80% | 13.80% |
M (under 21) | 0% | 0% | 13.80% |
Z (under 21 – deferment) | 0% | 0% | 13.80% |
Class 4 Lower Profits Limit (Annual) | £8,632 |
Class 4 Upper Profits Limit (Annual) | £50,000 |
Class 4 Rate Between Lower and Upper Profits | 9% |
Class 4 Rate Above Upper Profits | 2% |
Class 2 Earnings Exception Limit | £6,365 |
Class 2 Weekly Amount | £3.00 |
Class 2 Weekly Amount (Share Fisherman) | £3.65 |
Class 2 Weekly Amount (Volunteer Development Workers) | £5.90 |
You only pay tax on dividends that go above your dividend allowance in the tax year. The allowance for 2019/2020 is £2,000.
Band | Limits | Percentage |
Basic Rate | £0 – £37,500 | 7.5% |
Higher Rate | £37,501- £150,000 | 32.5% |
Additional/Top Rate | Over £150,000 | 38.1% |
Main Rate | 19% |
Annual Exempt Amount – Individuals, Personal Reps and Trustees for Disable People | £12,000 |
Annual Exempt Amount – Other Trustees | £6,000 |
CGT Tax Rates | |
Individuals – Basic Rate Taxpayer (Residential Property) | 18% |
Individuals – Higher Rate Taxpayer (Residential Property) | 28% |
Individuals – Basic Rate Taxpayer (Other Gains) | 10% |
Individuals – Higher Rate Taxpayer (Other Gains) | 20% |
Personal Representative of a Deceased Individual (Residential Property) | 28% |
Personal Representative of a Deceased Individual (Other Gains) | 20% |
Gains Qualifying for Entrepreneurs’ Relief | 10% |
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Sources:
https://www.uktaxcalculators.co.uk/tax-rates/2019-2020/
https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2019-to-2020#tax-thresholds-rates-and-codes
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