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Hart Accounting, Wirral, Merseyside

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Subject to any revisions from the latest Finance Act and to your own particular circumstances and other sources of income you may have and possibly the circumstances of those connected to you, a tax threshold is the amount you can earn or receive before you are required to pay tax. The list below relates only to most commonly encountered income sources, taxes and tax rates.

Income Tax

If your income exceeds the personal allowance threshold, you will start paying tax as follows:

Basic rate on the next £37,500

Higher rate on the next £100,000

Additional rate on any further income


Personal allowance (threshold) for individuals

Most common tax code for person under state pension age


Example…

£13,500 Wages for one year

£12,500 Personal threshold (tax exempt amount)

£1,000 Excess over the threshold

20% Applicable rate of tax (Basic rate)

£200 Income Tax due for the year (if no other income)

Class 1 National Insurance (NIC)

Employees


Threshold for employees to earn credits towards state pension (per annum)


Threshold for employees to start paying NIC (per annum)

Rate for employees


*If earnings exceed £962 per week, employees pay a reduced 2% on any earnings exceeding this higher threshold.


Employers

Threshold above which employers start paying NIC (per annum, per employee).

Rate for employers

National Insurance for sole traders and partners

Class 2 NIC -to be abolished next year

Rate (payable via your tax return)

Threshold


Class 4 NIC

Threshold

Main Rate  - for profits from £8632 to 50000

Threshold

Upper Rate - for profits over £50000




20%

40%

45%


£12,500

1250L



















£50,000






£85,000





£83,000

Amount you can earn(including the personal allowance £12500 and basic rate band £37500)  


…before you start paying income tax at 40% (or 32.5% for dividends) is now ….




VAT registration threshold from 01 April 2019 is…


And VAT de-registration threshold from 01 April 2019 is…








£6,136


£8,632

12.0%*






£8,632


13.8%




£3.00 p.w.

£0



£8632

9%

£50000

2%



If you are one of Hart Accounting’s clients and there is anything else you would find useful on this page, please let us know….