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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.
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
£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)
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.
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)
Class 4 NIC
Main Rate - for profits from £8632 to 50000
Upper Rate - for profits over £50000
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…
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….