UK Tax 2021
UK Tax Rates 2017-18Last partial update, July 2017
Individual Income Tax: The UK individual income tax rates for 2013-14 are 20%-45%.
UK Personal annual tax rates 2017-18
Dividend income is taxed at rates of 7.5%/32.5%/38.1%.
There is an exemption for the first GBP 5,000 dividend income.
The first GBP 1,000 interest income from savings is tax exempt.
Corporate Tax: UK's corporate tax rate for 2017-18 is 19%.
Capital Gains: Capital gains of individuals are generally taxed at several rates. There is an annual exemption of GBP 11,300.
Capital gain above the exempt sum is taxed at 10% up to GBP 33,500 and at 20% for capital gain above GBP 33,500.
Capital gains for companies are generally taxed at the standard corporate tax rate.
There is a participation exemption for sale of shares, subject to certain terms.
ResidenceAn individual in UK is resident when staying in the UK for more than 183 days in a tax year, or when having annual visits to the UK for 91 days in 4 consecutive years.
A company is UK resident if incorporated in the UK, or when the management is in the UK.
UK Tax Deductions
- Losses are carried forward indefinitely. Losses can be carried back for one year.
- A company holding 75% in a subsidiary can usually file a consolidated tax return.
- Depreciation is deducted using the reducing balance method.
- The depreciation rate for machinery and equipment is 25%.
Industrial buildings are depreciated on a straight line method, 4% per year.
- Companies involved in enterprise zones can claim 100% depreciation for commercial buildings.
UK Personal Credits and DeductionsFor British residents, the first annual income of GBP 11,500 is tax exempt in 2017-18.
The exemption is limited to annual income below GBP 100,000.
There are also tax credits for taxpayers aged 65-74, with higher credit for those above 75 years.
There is a standard deduction for each dependant.
Deductions are also permitted for pension plans payments by an employee.
There is a tax relief for gifts given to UK charities.
Deduction of Tax at Source in UKIn the UK tax is deducted at source from the following payments to non residents:
Dividend- 0%. (20% for dividends paid by REITs).
Note: Withholding rates are subject to double taxation treaties.
Interest and royalties are exempt under the EU directive.
Social Security in UKNational Insurance Contributions (NIC) in the UK.
The contributions by the employer and the employee are subject to to ceiling defined by law.
Employer: 13.8% on salary.
Employee: 12% on monthly salary of GBP 680- GBP 3,750, with additional 2% for monthly salary above GBP 3,750.
Self employed pay 9% for annual income of GBP 8,164- GBP 45,000 with additional 2% on income exceeding GBP 45,000.
You can find useful info in HM Revenue & Customs site hmrc.gov.uk
Note: The information in this site is for general guidance only. Users of this site are advised to take professional advice before taking practical tax decisions.
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