Every year there are changes to the UK’s income tax rates and brackets. Since 6th April 2018, there have been a number of amended rates and brackets put into play. Below we have summarised some of the key changes that have taken place to UK tax so far this financial year.
Changes to Income tax
Last year a number of important changes to UK tax rates were made:
· Revised ‘main’ rates. This applies both salary and self-employed income.
· A revised dividend allowance. This applies to those who take dividend income.
· Increased marriage allowance
The ‘main’ UK income tax rates and brackets for 2018/19 are:
Personal allowance- Up to £11,850- 0% T/R
Basic Rate- £11,851-£46,350-20% T/R
Higher Rate- £46,351-£150,000-40% T/R
Additional Rate- Over £150,000- 45% T/R
Will the Amended Tax Brackets how much tax you will pay?
In short, for-the-most-part, yes.
For example, if your total income £46,000 per annum you will pay 20% tax rather 40% on the last £1000 of your earnings, alongside a larger personal allowance.
Changes to Dividend Allowance
Since the 6th April this year, the tax-free dividend allowance has been lowered to a maximum of £2,000 a year tax-free. This is quite a drastic change compared to the previous £5,000 allowance.
There are a number of changes that have been made to National Insurance in the UK.
NI for employees 2018/19:
12%- £8,424 to £46,384
2%- Over £46,384
NI for self-employed 2018/19:
Class 2- £2.95 p/w
Class 4- 9% on profits between £8,424 to £46,350
Class 4- 2% on profits over £46,350