Tax
Tax Facts
Find out everything you need to know about personal and business tax rates and allowances for the current tax year
Our edition of Tax Facts is now available for 2024/25 where you will find details of all the latest business and personal tax rates and allowances.
Personal Tax
| Personal allowances# | 2024/25 | 2023/24 |
|---|---|---|
| Personal allowance* | £12,570 | £12,570 |
| Transferable marriage allowance** | £1,260 | £1,260 |
| Married couple’s allowance*** | £11,080 | £10,375 |
| Dividend allowance | £500 | £1,000 |
| Blind person’s allowance | £3,070 | £2,870 |
| Personal savings allowance for basic rate taxpayers | £1,000 | £1,000 |
| Personal savings allowance for higher rate taxpayers (nil for additional rate taxpayers) | £500 | £500 |
# £1,000 allowance each for property and trading income available, subject to various restrictions.
* The personal allowance is restricted by £1 for every £2 of income over £100,000, to a minimum of nil.
** Only available where both spouses/civil partners are basic rate taxpayers.
*** Married couple’s allowance is available where either partner was born before 6/4/1935 and is reduced by £1 for every £2 of income over £37,000 (£34,600 for 2023/24) to a minimum of £4,280 (£4,010 for 2023/24).
| Income tax rates – England, NI and Wales* | 2024/25 Taxable income | 2023/24 Taxable income |
|---|---|---|
| 0% starting rate for savings** | £5,000 | £5,000 |
| 20% basic rate | up to £37,700 | up to £37,700 |
| 40% higher rate | £37,701 – £125,140 | £37,701 – £125,140 |
| 45% additional rate# | over £125,140 | over £125,140 |
* The Welsh Government has devolved powers to be able to set the rates of income tax but remains in alignment with England and NI rates for 2023/24 and 2024/25.
** The starting savings rate is restricted by non-savings taxable income. No allowance will be available if the non-savings income exceeds the personal allowance plus the £5,000 starting rate.
# Rate applicable for accumulation or discretionary trusts for non-dividend income over £1,000 in 2023/24. The £1,000 threshold has been removed for 2024/25 and replaced with a new de minimis threshold of £500, income below which will not be taxable.
| Income tax rates – Scotland | 2024/25 taxable income | 2023/24 taxable income |
|---|---|---|
| 19% starter rate | up to £2,306 | up to £2,162 |
| 20% basic rate | £2,307 – £13,991 | £2,163 – £13,118 |
| 21% intermediate rate | £13,992 – £31,092 | £13,119 – £31,092 |
| 42% higher rate | £31,093 – £62,430 | £31,093 – £125,140 |
| 45% advanced rate | £62,431 – £125,140 | N/A |
| 47% top rate# | N/A | Over £125,140 |
| 48% top rate# | Over £125,140 | N/A |
# Rate applicable for accumulation or discretionary trusts for non-dividend income over £1,000 in 2023/24 and for all income (above a £500 de minimis) from April 2024.
| Dividend income* | 2024/25 | 2023/24 |
|---|---|---|
| Basic rate | 8.75% | 8.75% |
| Higher rate | 33.75% | 33.75% |
| Additional rate# | 39.35% | 39.35% |
* A £500 dividend allowance (£1,000 for 2023/24) is available, above which the rates shown are payable.
# Rate applicable for trusts for accumulation or discretionary trusts for dividend income over £1,000 in 2023/24 and for all income (above a £500 de minimis) from April 2024.
| High income child benefit charge (HICBC) | 2024/25 | 2023/24 |
|---|---|---|
| HICBC paid by spouse/partner with higher income if income exceeds* | £60,000 | £50,000 |
| Income above which HICBC is full amount of child benefit received** | £80,000 | £60,000 |
Every £200 of income above £60,000 adds one percentage point to the rate of HICBC (every £100 of income above £50,000 for 2023/24). HICBC is charged on the amount of child benefit received.
* Taxable income net of gift aid and allowable pension contributions, but not personal reliefs.
**No HICBC if person entitled to child benefit elects not to receive child benefit.
Income threshold – gross receipts £7,500 (£3,750 where at least one other person is entitled to the receipts)
| Individual savings account (ISA) limit | 2024/25 | 2023/24 |
|---|---|---|
| Maximum contribution | £20,000 | £20,000 |
| Junior ISA – maximum contribution* | £9,000 | £9,000 |
* Available for children under age 18 who live in the UK and do not have a child trust fund.
| Lifetime ISA | 2024/25 | 2023/24 |
|---|---|---|
| Upper age limit | 40 | 40 |
| Annual contribution limit | £4,000 | £4,000 |
| Government contribution | 25% | 25% |
Withdrawals can be made after 12 months to buy a home or for any reason after the age of 60. Other withdrawals are subject to a 25% penalty.
| Date | Event |
|---|---|
| 31 July 2024 | Second payment on account for 2023/24 |
| 5 October 2024 | Deadline for notification of chargeability 2023/24 |
| 31 October 2024 | File paper return for 2023/24 to HMRC |
| 30 December 2024 | File return for 2023/24 for a tax underpayment of less than £3,000 to be collected via PAYE during 2025/26 |
| 31 January 2025 | File electronic return for 2023/24 Balancing payment for 2023/24 First payment on account for 2024/25 |
| 2024/25 | 2023/24 | |
|---|---|---|
| Maximum tax allowable contributions* | £60,000** | £60,000** |
| Maximum tax allowable contributions not restricted to earnings | £3,600 | £3,600 |
Special rules attribute value to defined benefit (final salary) and other pension arrangements.
* Personal contributions are also capped at relevant earnings if higher than the minimum contribution.
Annual allowance will still be increased by unused relief for three previous tax years.
**The standard annual allowance will be reduced by £1 for every £2 of ‘adjusted income’ (which includes employer pension contributions) above £260,000 to a minimum of £10,000 but only if an individual also has ‘threshold income’ (broadly, an individual’s taxable income) of over £200,000.
A charge is applied to any excess pension contributions over and above the total allowance. The charge is levied at the individual’s marginal rate.
The annual allowance is reduced to £10,000 if more than 25% pension commencement lump sum has been drawn from a defined contribution pot, flexible drawdown has commenced or the income limit for capped drawdown has been exceeded.
| Annual exempt amounts | 2024/25 | 2023/24 |
|---|---|---|
| Individuals and personal representatives | £3,000 | £6,000 |
| Trusts generally | £1,500 | £3,000 |
| Rates of tax | 2024/25 | 2023/24 |
|---|---|---|
| Individuals – basic rate** | 10% | 10% |
| Individuals – higher or additional rate*** | 20% | 20% |
| Business asset disposal relief | 10% | 10% |
| Business asset disposal relief lifetime limit on gains | £1,000,000 | £1,000,000 |
| Investors’ relief | 10% | 10% |
| Investors’ relief lifetime limit on gains | £10,000,000 | £10,000,000 |
| Companies (corporation tax rates)* | 25% | 25% |
| Trusts and personal representatives*** | 20% | 20% |
* Where profits are less than £250,000 different CT rates will apply (see corporation tax section for further details).
** 8% surcharge for gains on residential property and carried interest.
*** 4% surcharge (8% for 2023/24) for gains on residential property and 8% surcharge for gains on carried interest.
Qualifying criteria for business asset disposal relief and investors’ relief
| Description | Business asset disposal relief | Investors’ relief |
|---|---|---|
| Acquisition of shares | At any point from anyone | Subscription for new shares after 16 March 2016 |
| Type of shares | Any | Ordinary |
| Holding period | 24 months to date of disposal | 36 months to date of disposal |
| Minimum shareholding | 5% of ordinary share capital, voting rights and entitlement to proceeds on disposal* unless through EMI | N/A |
| Company requirement | Trading company or holding company of a trading group | Unlisted trading company or unlisted holding company of a trading group |
| Employment condition | Employees or officer for at least 24 months prior to disposal | Investor and its associates must not be an employee or officer (some exceptions apply) |
* An alternative condition of beneficial entitlement to 5% of profits available for distribution and 5% of assets available on a winding up throughout the entire qualifying period can be met instead of the 5% entitlement to proceeds on disposal condition.
| Rates | 2024/25 | 2023/24 |
|---|---|---|
| 0% | Up to £325,000 | Up to £325,000 |
| 40% (death rate)* | Over £325,000 | Over £325,000 |
| 20% (lifetime rate) | Over £325,000 | Over £325,000 |
| Residence nil-rate band** | Up to £175,000 | Up to £175,000 |
Any unused percentage of the nil-rate band from the estate of a previously deceased spouse can be used on the death of the second spouse.
* A reduced rate of 36% applies where the deceased leaves at least 10% of their net estate to charity.
**The residence nil-rate band applies for a home passed to a direct descendent but is restricted where the estate is worth more than £2 million. The residence nil-rate band will reduce to zero for estates of £2.35 million or more.
| Major exemptions | ||
|---|---|---|
| Gifts to UK domiciled spouse and civil partner | Unlimited | |
| Gifts to non-UK domiciled spouse | £325,000 | |
| Gifts to charities | Unlimited | |
| Annual gifts* | £3,000 | |
| Small gifts to different individuals | £250 | |
| Gift on marriage |
|
£5,000 |
| Regular gifts out of surplus income | Unlimited | |
| Most transfers between individuals, if donor survives for 7 years | ||
*Unused annual allowance can be carried forward for one year only.
Taper relief
Taper relief is given in respect of tax due on chargeable gifts made between 3 and 7 years before death.
| Years between gift and death | Tax rate |
|---|---|
| Less than 3 | 40% |
| 3 to 4 | 32% |
| 4 to 5 | 24% |
| 5 to 6 | 16% |
| 6 to 7 | 8% |
| 7 or more | 0% |
| Agricultural property relief* | |
|---|---|
| Vacant possession available within 24 months | 100% |
| Landlords’ interest in let farmland | 50% |
| – for new tenancies let after 31 August 1995 | 100% |
| Business property relief** | |
|---|---|
| Unincorporated business | 100% |
| Unquoted shares in a trading company | 100% |
| Assets used in controlled business | 50% |
* The property must be either; owned and occupied for agricultural purposes by the same person for at least two years prior to disposal, or, owned for at least seven years prior to disposal where occupied by someone else for agricultural purposes.
**Assets must be held for at least two years to qualify.
| Enterprise investment scheme (EIS) | 2024/25 | 2023/24 |
|---|---|---|
| Maximum investment for income tax relief in qualifying ‘knowledge intensive companies’ | £2,000,000 | £2,000,000 |
| Maximum investment for income tax relief in qualifying non-knowledge intensive companies | £1,000,000 | £1,000,000 |
| Rate of income tax relief | 30% | 30% |
| Seed enterprise investment scheme (SEIS) | 2024/25 | 2023/24 |
|---|---|---|
| Maximum investment for income tax relief | £100,000 | £200,000 |
| Rate of income tax relief | 50% | 50% |
| Venture capital trusts (VCT) | 2024/25 | 2023/24 |
|---|---|---|
| Maximum investment for income tax relief | £200,000 | £200,000 |
| Rate of income tax relief | 30% | 30% |
Business Tax
| Year ending 31 March 2025 | Year ending 31 March 2024 | |
|---|---|---|
| Main rate | 25% | 25% |
| Small profits rate | 19% | 19% |
| Small profits limit | £50,000 | £50,000 |
| Marginal relief limit | £250,000 | £250,000 |
| Marginal rate | 26.5% | 26.5% |
| Loans to participators* | 33.75% | 33.75% |
* Where not repaid within nine months of the year end.
| 2024/25 | 2023/24 | ||||
|---|---|---|---|---|---|
| Annual investment allowance (AIA) | 100% on first £1,000,000 | 100% on first £1,000,000 | |||
| Writing down allowance (WDA) | |||||
| Full expensing 100% FYA* | 100% | 100% | |||
| Plant and machinery | 18% | 18% | |||
| Special rate pool – FYA** | 50% | 50% | |||
| WDA – special rate pool | 6% | 6% | |||
| Structures and buildings allowance (SBA) | 3% | 3% | |||
| Motor cars*** | |||||
| CO2 emissions of 0g/km – FYA | 100% | 100% | |||
| CO2 emissions 1g/km – 50g/km – WDA | 18% | 18% | |||
| CO2 emissions > 50g/km – WDA | 6% | 6% | |||
| Research and Development (R&D) allowances | 100% | 100% |
* Claimable by companies for expenditure on certain plant and machinery but excludes second hand assets and cars.
** Claimable by companies on special rate pool assets (e.g. integral features such as lighting and heating systems)
*** 100% first year allowances are only available for new and unused cars. 18% writing down allowance applies to second hand cars with zero emissions.
| 2024/25 | 2023/24 | |
|---|---|---|
| R&D merged scheme | 20% | N/A |
| SME tax credit* | N/A | 186% |
| SME payable credit | N/A | 10% |
| R&D intensive SME deduction rate | 186% | 186% |
| R&D intensive SME payable credit** | 14.5% | 14.5% |
| R&D expenditure credit | N/A | 20% |
| Patent Box | 10% | 10% |
* Relief capped at €7.5m per project.
** Available for loss making companies where R&D expenditure totals at least 30% (40% 2023/24) of total expenditure.
Quarterly instalment payments apply to large companies (taxable profits of at least £1,500,000 p.a. reduced pro rata by the number of associated companies).
Accelerated instalment payments apply to ‘very large’ companies (taxable profits of at least £20,000,000 p.a. again reduced pro rata by associated companies).
Timetable for corporation tax self-assessment and quarterly payments
| Event | Large companies due date
From start of accounting period: |
Very large companies due date From start of accounting period: |
|---|---|---|
| First quarterly payment date | 6 months and 13 days | 2 months and 13 days |
| Second quarterly payment date | 9 months and 13 days | 5 months and 13 days |
| Third quarterly payment date | 12 months and 13 days | 8 months and 13 days |
| Fourth quarterly payment date | 15 months and 13 days | 11 months and 13 days |
| Payment date for companies not in quarterly instalments regime | 9 months and 1 day after the end of the accounting period | |
| Filing date for tax return | Within 12 months of the end of the accounting period | |
Beneficial loans
| Threshold | £10,000 |
| Official rate of interest from 6 April 2023 | 2.25% |
| Company vans and fuel | 2024/25 | 2023/24 |
|---|---|---|
| Van benefit | £3,960 | £3,960 |
| Fuel benefit | £757 | £757 |
Fuel benefit – cars
The car fuel benefit is £27,800 multiplied by the relevant percentage as shown over page (plus 4% diesel supplement where applicable but capped at 37%).
Company cars
The car benefit is calculated by multiplying the list price of the car when new (not the purchase price) by a percentage that is dependent on the level of approved CO2 emissions of the car.
| CO2 emissions in g/km | Electric range (miles) |
% of car’s list price to be taxed | CO2 emissions in g/km | % of car’s list price to be taxed | |
|---|---|---|---|---|---|
| 0 | N/A | 2 | 95-99 | 24 | |
| 1-50 | >130 | 2 | 100-104 | 25 | |
| 1-50 | 70-129 | 5 | 105-109 | 26 | |
| 1-50 | 40-69 | 8 | 110-114 | 27 | |
| 1-50 | 30-39 | 12 | 115-119 | 28 | |
| 1-50 | <30 | 14 | 120-124 | 29 | |
| 51-54 | 15 | 125-129 | 30 | ||
| 55-59 | 16 | 130-134 | 31 | ||
| 60-64 | 17 | 135-139 | 32 | ||
| 65-69 | 18 | 140-144 | 33 | ||
| 70-74 | 19 | 145-149 | 34 | ||
| 75-79 | 20 | 150-154 | 35 | ||
| 80-84 | 21 | 155-159 | 36 | ||
| 85-89 | 22 | 160+ | 37 | ||
| 90-94 | 23 |
This percentage is increased by 4% for cars propelled solely by diesel that do not meet the Real Driving Emissions Step 2 (RDE2) standards but subject to an overall cap at 37%.
45p per mile for the first 10,000 miles and 25p for additional mileage above that limit. Employers can also pay up to 5p per mile for each employee who travels as a passenger on a business journey.
HMRC’s approved ‘tax-free’ business mileage rates for employees using company cars are reviewed quarterly, with any changes taking effect from 1 March, 1 June, 1 September and 1 December. The rates are the maximum amount that can be paid without a charge to tax and NIC for business miles.
If an employee receives less than these rates, then they can claim tax relief on the difference.
The current rates can be found here.
| Class 1 – Employers and employees | 2024/25 | 2023/24 | |
|---|---|---|---|
| Lower earnings limit (LEL) per week | £123 | £123 | |
| Primary threshold per week | £242 | £242 | |
| Secondary threshold per week | £175 | £175 | |
| Upper earnings limit (UEL) per week | £967 | £967 |
Earnings over the LEL qualify an individual for certain state benefits and must be reported under PAYE, but no employee’s NICs are payable until earnings exceed the primary threshold of £242 per week and £12,570 per annum and employer’s NICs once earnings exceed the secondary threshold of £175 per week (£9,100 per annum).
| 2024/25 | 2023/24 | ||
|---|---|---|---|
| Class 1 – Employer’s |
|
13.8% | 13.8% |
| Class 1 – Employee’s |
|
8% 2% 1.85% |
12%/10%** 2% 5.85%/3.85%** |
| Class 1A (taxable benefits) | 13.8% | 13.8% | |
| Class 1B (PAYE settlement agreement) | 13.8% | 13.8% | |
| Class 2 (self-employed) |
|
£6,725 £3.45 £0 £0 |
£6,725 £3.45 £0 |
| Class 3 (voluntary) |
|
£17.45 | £17.45 |
| Class 4 (self-employed) |
|
£12,570 £50,270 6% 2% |
£12,570 £50,270 9% 2% |
| Employment allowance (per employer)* | £5,000 | £5,000 | |
* Businesses will not qualify for the Employment Allowance where they are sole director companies or have an employer’s Class 1 NIC bill of more than £100,000 In the previous tax year.
**The higher rate applied between 6 April 2023 and 5 January 2024 dropping to the lower rate with effect from 6 January 2024. A blended Class 1 rate of 11.5% applies to the Annual earnings Period for directors in 2023/24.
Indirect Tax
| 2024/25 | 2023/24 | |
|---|---|---|
| Standard rate | 20% | 20% |
| Reduced rate | 5% | 5% |
| Registration threshold | £90,000 | £85,000 |
| Deregistration threshold | £88,000 | £83,000 |
| Cash accounting entry limit | £1,350,000 | £1,350,000 |
| Cash accounting exit limit | £1,600,000 | £1,600,000 |
| Annual VAT returns entry limit | £1,350,000 | £1,350,000 |
| Annual VAT returns exit limit | £1,600,000 | £1,600,000 |
| Flat rate scheme taxable turnover entry limit | £150,000 | £150,000 |
| Flat rate scheme total business income exit limit | £230,000 | £230,000 |
| Residential property*# – England & NI** | SDLT rate | Additional property |
|---|---|---|
| Up to £250,000 | Zero | 3% |
| Over £250,000 to £925,000 | 5% | 8% |
| Over £925,000 to £1,500,000 | 10% | 13% |
| Over £1,500,000 | 12% | 15% |
Qualifying purchases in freeport tax sites will be eligible for full SDLT relief.
| Residential property*# – Scotland | LBTT rate | Additional property |
|---|---|---|
| Up to £145,000 | 0 | 6% |
| Over £145,000 to £250,000 | 2% | 8% |
| Over £250,000 to £325,000 | 5% | 11% |
| Over £325,000 to £750,000 | 10% | 16% |
| Over £750,000 | 12% | 18% |
| Residential property*# – Wales | ||
|---|---|---|
| LTT rate | Additional property | |
| Up to £180,000 | 0 | 4% |
| Over £180,000 to £225,000 | 0 | 7.5% |
| Over £225,000 to £250,000 | 6% | 7.5% |
| Over £250,000 to £400,000 | 6% | 9% |
| Over £400,000 to £750,000 | 7.5% | 11.5% |
| Over £750,000 to £1,500,000 | 10% | 14% |
| Over £1,500,000 | 12% | 16% |
*A further 2% SDLT surcharge also applies on residential property acquired in England and Northern Ireland by non-UK residents.
**Residential properties in England and Northern Ireland purchased by a non-natural person (e.g. company) in excess of £500,000 are subject to a 15% rate on the entire consideration, subject to certain exemptions.
# First time buyers purchasing a residential property in England worth less than £425,000 are exempt from SDLT. First time purchases with a value of between £425,000 and £625,000 will pay SDLT at a rate of 5% on the amount in excess of £425,000. No relief is available for purchases above £625,000. In Scotland, first time buyers’ relief from LBTT is available on the first £175,000 of the property purchase. There is no first time buyers’ relief in Wales.
| Non-residential or mixed use property | England & NI (SDLT) |
Scotland (LBTT) |
Wales (LTT) |
|---|---|---|---|
| Up to £150,000 | 0 | 0 | 0 |
| Over £150,000 to £225,000 | 2% | 1% | 0 |
| Over £225,000 to £250,000 | 2% | 1% | 1% |
| Over £250,000 to £1,000,000 | 5% | 5% | 5% |
| Over £1,000,000 | 5% | 5% | 6% |
| Residential leases* | SDLT rate |
|---|---|
| Up to £250,000 | 0 |
| Over £250,000 | 1% |
* Based on net present value of rents. Nil in Wales and generally exempt in Scotland.
| Non-residential/mixed-use leases* | England & NI (SDLT) | Scotland (LBTT) | Wales (LTT) |
|---|---|---|---|
| Up to £150,000 | 0 | 0 | 0 |
| Over £150,000 to £225,000 | 1% | 1% | 0 |
| Over £225,000 to £2,000,000 | 1% | 1% | 1% |
| Over £2,000,000 to £5,000,000 | 1% | 2% | 2% |
| Over £5,000,000 | 2% | 2% | 2% |
* Based on net present value of rents.
| Other | SD rate |
|---|---|
| Share purchases over £1,000 | 0.5% |
* Rounded up to the nearest £5.
The filing date for ATED returns and payment is 30 April 2024 for properties in the charge to tax on 1 April 2024.
| Property value (£) | 1 April 2024 – 31 March 2025 ATED charge |
1 April 2023 – 31 March 2024 ATED charge |
|---|---|---|
| 500,001 – 1,000,000 | £4,400 | £4,150 |
| 1,000,001 – 2,000,000 | £9,000 | £8,450 |
| 2,000,001 – 5,000,000 | £30,550 | £28,650 |
| 5,000,001 – 10,000,000 | £71,500 | £67,050 |
| 10,000,001 – 20,000,000 | £143,550 | £134,550 |
| 20,000,001 + | £287,500 | £269,450 |
Proposed changes 2025/26
- Furnished holiday lettings (FHL) tax regime is to be abolished with effect from April 2025
- The remittance basis for non-UK doms will be abolished and replaced with a residency based system from April 2025. Under the new regime non doms will not pay UK tax on foreign earnings in the first four tax years of residence, provided they have been non-tax resident for the last 10 years. Transition rates will apply to existing non-UK doms claiming the remittance basis.