Personal Information
Personal Tax
- The standard personal allowance is currently £12,570.
- Basic rate tax is at 20% between £12,570 and £50,270.
- Tax payers will pay 40% tax once income exceeds £50,270 (£12,570 + £37,700)
- 45% tax for those whose income exceeds £150,000
National Insurance
- Employees are charged at 12% and 2% with Self Employed profits charged at 9% and 2%.
- Employers will pay 13.8% on salaries and benefits.
Mileage
- The mileage allowance an employer can pay to an employee for use of the employee’s own car is 45p per mile up to 10,000 miles and 25p thereafter.
- If an employer pays less, the employee can claim tax relief for the difference as a deductible expense.
Capital Gains
- The rate of CGT for disposals is determined by adding the tax payer’s chargeable gains to taxable income. If this falls within the ‘basic rate’ band then 10% is charged. If the higher rate for income tax is exceeded then 20% applies.
- These rates of tax become 18% and 28% if the gain is in relation to residential property (payable within 30days).
- The annual exempt amount is £12,300 per person
Corporate information
Corporation Tax
- Companies are charged the same rate of corporation tax regardless of profits at 19%. This will begin to change in financial year 2023.
Capital Allowances
- Annual Investment Allowance (AIA) is currently £1,000,000 (until 31.12.21)
- Writing Down Allowances still apply on the “reducing balance” of expenditure.
VAT
- The registration threshold for VAT is £85,000 and deregistration is £83,000.
- The standard rate of VAT is 20%.