In the Autumn Budget, the Chancellor has announced the income tax rates for the year 2018/19 tax year.
New tax year starts in April. New personal allowances and dividend rates are changing. its hard time for contractors as the tax-free dividend will be reduced from £5000 to £2000 which means extra tax to pay.
Nothing’s as certain as death and taxes. Yet while there’s no doubt we’ll all be taxed, the rates can change rapidly. Will you pay the basic rate of 20% or will you end up in the higher rate 40% tax bracket?
We have listed the new tax rates below.
- Income up to £11,850 – 0% income tax. This is your personal tax-free allowance
- Income between £11,850 and £46,350 – 20% income tax
- Income between £46,351 and £150,000 – 40% income tax
- Income above £150,001 – 45% income tax
- Tax-free Dividend £2000
- Note that your personal allowance will reduce by £1 for every £2 you earn over £100,000. So, by the time you earn, £123,700, you’ll pay income tax on everything you earn and get no personal tax-free allowance.
- Oxon Accountancy 01235 250011