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UK PAYE Tax Rates and Allowances 2018/19

We have published a quick reference to the significant changes to the tax rates and bands, personal tax allowances and national insurance figures which come into effect from April 6th 2018.

Personal PAYE Allowances

Allowance2016/172017/182018/19Change
Basic £11,000 £11,500 £11,850 + £350
People born between 6th April 1938 - 5th April 1948 £11,000 £11,500 £11,850 + £350
People born before 6th April 1938 £11,000 £11,500 £11,850 + £350
Married Couples Allowance ( if born before 6th April 1935) £8,355 £8,445 £8,695 + £250
Blind Person's Allowance £2,290 £2,320 £2,390 + £70
Marriage Allowance* £1,100 £1,150 £1,190 + £40

* An annual transferable allowance between spouses of £1,060 was introduced for 2015/16 tax year. This year, 2018/19 the transferable allowance increases to £1,190. A spouse or civil partner who is not liable to income tax above the basic rate may transfer up to £1,190 of their unused personal allowance to their spouse/civil partner, provided that the recipient of the transfer is not liable to income tax above the basic rate. This measure will only be of benefit to those in the lower income bracket.

From 2016-17 onward, all individuals will be entitled to the same personal allowance, regardless of the individuals’ date of birth. This allowance is subject to the £100,000 income limit which applies regardless of the individual’s date of birth. The individual’s personal allowance is reduced where their income is above this limit. The allowance is reduced by £1 for every £2 above the limit

The Age Related Income Limit for 2017/18 is £28,900. if you are over 65 years and your earnings are above £28,900 -  your Personal Allowance will be reduced by £1 for every £2 you earn over that £28,900 limit.

Tax Brackets

Tax Rate2016/172017/182018/19Change
Basic rate 20% £0 - £32,000 £0 - £33,500 £0 - 34,500 widened by £1,000
Higher Rate 40% £32,001 - £150,000 £33,501 - £150,000 £34,501 - £150,000 cut by £1,000
Additional Rate 45% £150,001+ £150,001+ £150,001+ no change
NOTE: These rates are applied after your tax free allowance has been deducted from your gross wage.

The widening of the Basic Rate tax bracket and the increase in the Basic Personal Allowance means you can earn more this coming tax year before crossing into the 40% tax bracket. If you take the new Basic Tax Rate threshold of £34,500 and add it it the new Basic Personal Allowance of £11,850, we see that for 2018/19 you can earn £46,350 before you cross in to 40% tax territory.

Change in take home pay after tax and NI

Gross WageNet Pay 2016/17Net Pay 2017/18Net Pay 2018/19Difference
£10,000 £9,767 £9,780 £9,811 +31
£20,000 £16,767 £16,880 £16,983 +103
£30,000 £23,567 £23,680 £23,783 +103
£40,000 £30,367 £30,480 £30,583 +103
£50,000 £36,466 £36,776 £37,019 +243
£75,000 £50,966 £51,276 £51,519 +243
£100,000 £65,466 £65,776 £66,019 +243
£125,000 £75,566 £75,676 £75,776 +100
£150,000 £90,066 £90,176 £90,276 +100

Source listentotaxman.com®

National Insurance

There have been no changes to the percentage of National Insurance Class 1 contributions, they remain at 12% for employees, and 2% above the upper earnings limit. Employers Class 1 have remained the same at 13.8%. The limits and thresholds have changed, as illustrated in the table below. See HMRC for a more detailed view of NIC changes to other Classes.

National Insurance Bands

Description2016/172017/182018/19 Change
Weekly Lower earnings limit, primary Class 1 £112 £113 £116 + £3
Weekly Upper earnings limit, primary Class 1 £827 £866 £892 + £26
Weekly Primary threshold £155 £157 £162 + £5
Weekly Secondary threshold £156 £157 £162 + £5
Weekly Upper Secondary Threshold for U21s £827 £866 £892 + £26
Apprentice Upper Secondary Threshold for U25s £827 £866 £892 + £26
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