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Upcoming changes
These rates were confirmed by Chancellor Philip Hammond in Budget 2018 and are subject to future change should the UK fail to reach an agreement with the EU over its exit.
Personal
Income tax bands and rates
The bands and rates at which people in England, Northern Ireland, Wales pay income tax will change for 2019/20, but it will be business as usual for taxpayers in Scotland.
The following income tax bands and thresholds will be in place from 6 April 2019:
Table 1: England, Northern Ireland & Wales
| Band | Taxable income 2019/20 | Rate |
| Personal allowance | Up to £12,500 | 0% |
| Basic rate | £12,501 to £50,000 | 20% |
| Higher rate* | £50,001 to £150,000 | 40% |
| Additional rate* | Above £150,000 | 45% |
Table 2: Scotland
| Band | Taxable income 2019/20 | Rate |
| Personal allowance | Up to £12,500 | 0% |
| Starter rate | £12,501 to £14,549 | 19% |
| Basic rate | £14,550 to £24,944 | 20% |
| Intermediate rate | £24,945 to £43,430 | 21% |
| Higher rate* | £43,431 to £150,000 | 41% |
| Top rate* | Above £150,000 | 46% |
* The personal allowance is reduced by £1 for each £2 of income from £100,000 to £125,000 (2018/19, £123,700).
Table 3: Tax on dividends (throughout the UK)
| Dividend allowance | £2,000 |
| Basic rate | 7.5% |
| Higher rate | 32.5% |
| Additional rate | 38.1% |
ISAs
The £20,000 limit may also be used to invest in a lifetime ISA, which has a maximum allowance in 2019/20 of £4,000.
Pensions
The lifetime allowance, which is the maximum amount an individual can draw from pensions without incurring extra tax charges, rises to £1.055 million from 6 April 2019.
Capital gains tax
The capital gains tax (CGT) annual exempt amount for individuals rises from £11,700 to £12,000 from 6 April 2019. At the same time, the annual exemption for trusts increase from £5,850 to £6,000.
Business
Corporation tax
| Financial year from 1 April | 2019 | 2018 |
| Corporation tax rate | 19% | 19% |
| Loans to participators | 32.5% | 32.5% |
The intention to cut the rate of corporation tax to 17% in 2020/21 remains on course.
Auto-enrolment
From 6 April 2019, the minimum employer contribution towards an employee’s workplace pension will increase from 2% to 3%, while eligible employees will see their minimum contributions increase from 3% to 5% of their pensionable earnings.
These contributions are mandatory for workers aged between 22 and state pension age, earning more than £10,000 a year.
National living wage rates
National living wage rates for all ages and apprentices are increasing from 1 April 2019.
2019/20 rates
- Over-25s – £8.21
- 21 to 24 – £7.70
- 18 to 20 – £6.15
- Under-18s – £4.35
- Apprentice – £3.90*
*If under 19 or in the first year of apprenticeship.
VAT
| From 1 April | 2019 | 2018 |
| Standard rate | 20% | 20% |
| VAT fraction | 1/6 | 1/6 |
| Reduced rate e.g. on domestic fuel | 5% | 5% |
| VAT fraction | 1/21 | 1/21 |
Taxable turnover limits
| From 1 April | 2019 | 2018 |
| Registration (last 12 months or next 30 days) over | £85,000 | £85,000 |
| Deregistration (next year) under | £83,000 | £83,000 |
| Registration for distance selling into the UK (last 12 months or next 30 days) over | £70,000 | £70,000 |
| Annual and cash accounting schemes turnover limit | £1.35m | £1.35m |
| Flat rate scheme turnover limit | £150,000 | £150,000 |
The VAT-registration threshold is to stay at £85,000 until April 2022.
A new VAT reverse charge for construction businesses will come into effect on 1 October 2019.
The reverse charge could put the onus on customers who buy supplies or construction services to account for VAT and report it to HMRC instead of the supplier.