All your tax allowances for 2019/20 in the Lake District. From Personal to Corporate. Whilst we have aimed it at our Cumbrian customers in Kendal, Ulverston, Lancaster and the surrounding area. We have included rates for Scotland and Wales.
The personal allowance is increased to £12,500 for 2019/20, subject to abatement where adjusted net income exceeds £100,000. The personal allowance applies equally to Scottish and Welsh taxpayers.
The allowance is reduced by £1 for every £2 by which adjusted net income exceeds £100,000. This means that for 2019/20, individuals with income in excess of £125,000 will not receive a personal allowance, while those whose income falls between £100,000 and £125,000 will receive a reduced personal allowance.
The marriage allowance allows one spouse or civil partner to transfer 10% of their personal allowance to their partner, provided that neither pays tax at the higher or additional rates. The marriage allowance is £1,250 for 2019/20, allowing a couple to save tax of £250.
Income tax rates and thresholds
For England and Northern Ireland, the basic rate band is increased to £37,500 for 2019/20, raising the rate at which higher rate tax becomes payable to £50,000. The additional rate threshold remains at £150,000.
The basic rate of tax remains at 20%, the higher rate at 40% and the additional rate at 45%.
The rates also apply to the savings and dividend income of Scottish and Welsh taxpayers.
Scottish rates of income tax
As for 2018/19, there are five rates of Scottish income tax for 2019/20. The Scottish rates of income tax apply to the non-savings non-dividend income of Scottish taxpayers.
The Scottish starter rate of tax of 19% applies to the first £2,049 of taxable income, the Scottish basic rate of 20% applies to taxable income between £2,050 and £12,144, the Scottish intermediate rate of 21% applies to taxable income between £12,145 and £30,930, the Scottish higher rate of 41% applies to taxable income between £30,931 and £150,000 and the Scottish top rate of 46% applies to taxable income over £150,000.
Welsh rates of income tax
From 6 April 2019, Welsh taxpayers pay the Welsh rate of income tax on their non-savings non-dividend income. For 2019/20, the Welsh rates of income tax and tax bands are the same as for England and Northern Ireland.
Taxation of dividends
The dividend allowance remains at £2,000 for 2019/20 and is available to all individuals regardless of the rate at which they pay tax. Dividends falling within the allowance are taxed at a zero rate.
Taxable dividends, which are treated as the top slice of income, remain taxable at 7.5% to the extent that they fall within the basic rate band, at 32.5% to the extent that they fall within the higher rate band and at 38.1% to the extent that they fall within the additional rate band.
For 2019/20, the savings allowance remains at £1,000 for basic rate taxpayers and at £500 for higher rate taxpayers. Additional rate taxpayers are not entitled to a savings allowance.
The savings starting rate of tax remains at 0%. This rate is only available to the extent that taxable
non-savings income is not more than £5,000. Where taxable non-savings income exceeds £5,000, the starting rate band is reduced by the excess.
Capital gains tax
The capital gains tax annual exemption is increased to £12,000 for 2019/20. The capital gains tax rates remain at 10% to the extent that taxable income and gains do not exceed the basic rate limit of £37,500 and at 20% where income and gains are more than this limit. Residential property gains are taxed at a higher rate of 18% to the extent that income and gains are below the basic rate limit and at 28% otherwise.
The corporation tax rate remains at 19% for the financial year 2019, starting on 1 April 2019.
The VAT threshold remains at £85,000 for 2019/20 and the de-registration threshold remains at £83,000.
National Insurance contributions
For 2019/20 the lower earnings limit for Class 1 National Insurance purposes is increased to £118 per week, the primary and secondary thresholds are increased to £166 per week and the upper earnings limit is increased to £962 per week. The secondary threshold for under 21s and the apprentice upper secondary threshold, which are aligned with the upper earnings limit, also rise to £962 per week.
The main rate of employee Class 1 National Insurance contributions, payable on earnings between the primary threshold and the upper earnings limit, remains at 12% and the additional primary rate, payable on earnings in excess of the upper earnings limit, remains at 2%. The employer rate, payable on earnings above the relevant secondary threshold, remains at 13.8%, as does the Class 1A and Class 1B rate.
The employment allowance also remains at £3,000 for 2019/20.
The self-employed will continue to pay Class 2 and Class 4 contributions for 2019/20. Class 2 contributions are payable at a rate of £3 per week for 2019/20 where earnings exceed the small profits threshold, which is set at £6,365 for 2019/20. Class 4 contributions are payable at the main rate of 9% on profits between the lower profits limit, set at £8,632 for 2019/20, and the upper profits limit, set at £50,000 for 2019/20, and at the rate of 2% on profits in excess of the upper profits limit.
The rate of voluntary Class 3 National Insurance contributions is set at £15 per week for 2019/20.