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Income tax
| Tax bands and rates | 2017/18 | 2016/17 | |
| Basic rate band | £33,500 | £32,000 | |
| Basic rate band - Scotland | £31,500 | £32,000 | |
| Basic tax rate | 20% | 20% | |
| Dividend ordinary tax rate | 7.5% | 7.5% | |
| Savings starting rate band | £5,000* | £5,000* | |
| Savings starting rate - savings income | 0% | 0% | |
| Higher rate band | £33,501 - £150,000 | £32,001 - £150,000 | |
| Higher rate band - Scotland | £31,501 - £150,000 | £32,001 - £150,000 | |
| Higher tax rate | 40% | 40% | |
| Dividend upper tax rate | 32.5% | 32.5% | |
| Additional rate band over | £150,000 | £150,000 | |
| Additional tax rate | 45% | 45% | |
| Dividend additional tax rate | 38.1% | 38.1% | |
| Personnal allowance | £11,500 | £11,000 | |
| Trading allowance** | £1,000 | £0 | |
| Property allowance** | £1,000 | £0 | |
| Marriage allowance | Transferable allowance | £1,150 | £1,100 |
| Blind person's allowance | £2,320 | £2,290 | |
| Married couple's allowance (MCA) | Maximum amount | £8,445 | £8,355 |
| Tax reduction at 10% | £844.50 | £835.50 | |
| Applies after UK residence in 7 or more of the previous 9 tax years |
£30,000 | £30,000 | |
| Applies after UK residence in at least 12 of the previous 14 years | £60,000 | £60,000 | |
| Applies after UK residence in at least 17 of the last 20 years | n/a | £90,000 | |
|
Enterprise investment scheme (EIS) up to |
£1,000,000 | £1,000,000 | |
| Maximum amount for EIS carry back | £50,000 | £50,000 | |
| Income tax relief rate | 30% | 30% | |
| Seed enterprise investment scheme (SEIS) | £100,000 | £100,000 | |
| Income tax relief | 50% | 50% | |
| Venture capital trust (VCT) | £200,000 | £200,000 | |
| Social investment relief | £1,000,000 | £1,000,000 | |
| Income tax relief | 30% | 30% | |
| VCT tax relief rate | 30% | 30% | |
| Golden handshake maximum tax free | £30,000 | £30,000 | |
| Rent a room - exempt on gross annual rent up to | £7,500 | £7,500 | |
| Construction industry scheme - deduction rate | |||
| Standard rate - registered | 20% | 20% | |
| Higher rate - not registered | 30% | 30% | |
*Savings income falling into the first £5,000 may be taxed at 0% for certain low income earners.
**When the gross income is £1,000 or less.
2018 and beyond
It is intended to increase the personal allowance to £12,500 and the higher rate threshold to £50,000, but no timetable for these increases has been announced. Once these limits have been attained they will, in future, be index linked by reference to the CPI (Consumer Prices Index).
Termination payments over £30,000 which are subject to income tax after April 2018 will also be subject to employers national insurance contributions.
Income tax will only be applied on the equivalent of an employee’s basic pay if the employee has not worked the notice period.