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 | £227.88 per week £987.50 per month £11,850 per year |
Basic tax rate | 20% on annual earnings above the PAYE tax threshold and up to £46,350 |
Higher tax rate | 40% on annual earnings from £46,351 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 | £116 per week |
Primary Threshold (PT) | £162 per week |
Secondary Threshold (ST) | £162 per week |
Upper Secondary Threshold (under 21) (UST) | £892 per week |
Apprentice Upper Secondary Threshold (apprentice under 25) (AUST) | £892 per week |
Upper Earnings Limit (UEL) | £892 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) | £8,424 |
Class 4 Upper Profits Limit (Annual) | £46,350 |
Class 4 Rate Between Lower and Upper Profits | 9% |
Class 4 Rate Above Upper Profits | 2% |
Class 2 Earnings Exception Limit | £6,205 |
Class 2 Weekly Amount | £2.95 |
Class 2 Weekly Amount (Share Fisherman) | £3.60 |
Class 2 Weekly Amount (Volunteer Development Workers) | £5.80 |
You only pay tax on dividends that go above your dividend allowance in the tax year. The allowance for 2018/2019 is £2,000.
Band | Limits | Percentage |
Basic Rate | £0 – £34,500 | 7.5% |
Higher Rate | £34,501- £150,000 | 32.5% |
Additional/Top Rate | Over £150,000 | 38.1% |
Main Rate | 19% |
Articles on this website are offered only for general informational and educational purposes. They are not offered as, and do not constitute, financial advice. You should not act or rely on any information contained in this website without first seeking advice from a professional.
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Sources:
https://www.uktaxcalculators.co.uk/tax-rates/2018-2019/
https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2019-to-2020#tax-thresholds-rates-and-codes
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