TAX RATES & TABLES
Introduction
Our Tax Rates provides a summary of some of the essential tax rates, dates and figures for 2024/25.
These Tax Rates are for guidance only and professional advice should be obtained before acting on any information contained as no responsibility can be accepted for loss occasioned as a result of action taken or refrained from in consequence of its contents.
Income Tax
Tax Rates | 2024/25 | 2023/24 |
|---|---|---|
Basic Rate Band | £37,700 | £37,700 |
Basic rate | 20% | 20% |
Dividend ordinary rate | 8.75% | 8.75% |
Higher Rate - taxable income over | £37,700 | £37,700 |
Higher tax rate | 40% | 40% |
Additional Rate - taxable income over | £150,000 | £150,000 |
Additional tax rate | 45% | 45% |
Dividend upper rate | 33.75% | 33.75% |
Allowances that reduce taxable income | 2024/25 | 2023/24 |
Personal allowance (PA) Under 65 | £12,570 | £12,570 |
Dividend Allowance | £500 | £1,000 |
Rent A Room Allowance | £7,500 | £7,500 |
National Insurance Contributions (2024/25)
Class 1 (not contracted out) | Employer | Employee |
|---|---|---|
Lower earnings limit | £242 | |
Payable on weekly earnings | ||
£123.00 -£242.00 | 13.8% | NIL |
£242,01 - £967 | 13.8% | 8% |
Over £967 | 13.8% | 2% |
Over state retirement age | 13.8% | NIL |
Class 1A (on relevant benefits) | 13.8% | NIL |
Class 1B (on PAYE settlement arrangement) | 13.8% | NIL |
Class 2 (self employed) | £179.40 per year | |
Limit of net earnings for exception | £6,725 per annum | |
Class 3 (Voluntary) | £17.45 per week | |
Class 4 (*self employed on profits) | ||
£12,570 to £50,270 | 6% | |
Excess over £50,270 | 2% |
* Exemption applies if state retirement age was reached by 6th April 2025
Corporation Tax
Corporation tax rates and bands are as follows:
Financial year to | 31 March 2024 | 31st March 2025 |
|---|---|---|
19% | 19% |
Capital Allowances
Plant & Machinery
-
Energy saving and environmentally beneficial equipment, electric and low CO2 emission cars, natural gas, hydrogen refuelling equipment, first year allowance – 100%.
-
Annual investment allowance (AIA) – 100% (excludes cars and expenditure already qualifying for 100% first year allowance).
-
Writing down allowance (WDA) on expenditure not qualifying for AIA: Long-life assets, integral features of building – 6%.
-
Other plant and machinery – 18%.
-
Cars, other than electric and low CO2 emission – 6%.
Value Added Tax
From 1st April 2025 | From 1st April 2024 | |
|---|---|---|
Standard Rate | 20%
| 20%
|
Gross VAT fraction | 1/6 | 1/6 |
Taxable Turnover Limits | ||
Registration - last 12 months or next 30 days over | £90,000 | £85,000 |
Deregistration - next 12 months under | £88,000 | £83,000 |
Cash accounting scheme - up to | £1,350,000 | £1,350,000 |
Optional flat rate scheme - up to | £150,000 | £150,000 |
Annual accounting scheme - up to | £1,350,000 | £1,350,000 |
VAT on fuel for private use in cars
Where businesses buy fuel which has some degree of private use, they must account for output VAT on a scale charge. This is based on the CO2 emissions (rounded down to the next multiple of 5). The VAT chargeable for quarters commencing after 1st May 2020 is as follows:
CO2 in g/km | VAT on charge | CO2 in g/km | VAT on charge | CO2 in g/km | VAT on charge |
|---|---|---|---|---|---|
up to 120 | £24.00 | ||||
120 to 125 | £36.17 | 156 to 160 | £53.17 | 191 to 195 | £70.17 |
126 to 130 | £38.50 | 161 to 165 | £55.67 | 196 to 200 | £72.67 |
131 to 135 | £41.00 | 166 to 170 | £58.00 | 201 to 205 | £75.00 |
136 to 140 | £43.50 | 171 to 175 | £60.33 | 206 to 210 | £77.33 |
141 to 145 | £45.83 | 176 to 180 | £62.83 | 211 to 215 | £78.83 |
146 to 150 | £48.33 | 181 to 185 | £65.33 | 216 to 220 | £82.17 |
151 to 155 | £50.83 | 186 to 190 | £67.67 | 221 and over | £84.60 |
Inheritance Tax
2024/25 | 2023/24 | |
|---|---|---|
Standard threshold | £325,000 | £325,000 |
Combined threshold maximum for married couples and civil partners | £650,000 | £650,000 |
Rate of Tax on balance: | ||
Chargeable lifetime transfers | 20% | 20% |
Transfers on, or within 7 years of, death | 40% | 40% |
All lifetime transfers not covered by exemptions and made within seven years of death will be added back into the estate for the purpose of calculating the tax payable. Tax attributable to such transfers is then reduced.
Years before death | 0-3 | 3-4 | 4-5 | 5-6 | 6-7 |
|---|---|---|---|---|---|
Tax reduced by | 0% | 20% | 40% | 60% | 80% |
Vehicle Benefits
Chargeable on all employees including directors.
-
Car benefit
-
Car fuel benefits
-
Company vans
Car Benefits
The tax you pay on your company car is governed by four factors:
-
The list price of the car, on the day before it was first registered, plus certain accessories.
-
The rate at which the car emits carbon dioxide (CO2).
-
The fuel type, (for most types of car, this is all the information you need to work out the taxable benefit).
-
Your marginal rate of income tax.
You can find your taxable percentage for 2024/25 using the following table:
CO2 in g/km | Taxable % | CO2 in g/km | Taxable % | ||
|---|---|---|---|---|---|
Petrol | Diesel | Petrol | Diesel | ||
0 to 50 | 14% | 18% | 106 to 110 | 26% | 30% |
51 to 55 | 15% | 19% | 111 to 115 | 27% | 31% |
56 to 60 | 16% | 20% | 116 to 120 | 28% | 32% |
61 to 65 | 17% | 21% | 121 to 125 | 29% | 33% |
66 to 70 | 18% | 22% | 126 to 130 | 30% | 34% |
71 to 75 | 19% | 23% | 131 to 136 | 31% | 35% |
76 to 80 | 20% | 24% | 136 to 140 | 32% | 36% |
81 to 85 | 21% | 25% | 141 to 145 | 33% | 37% |
86 to 90 | 22% | 26% | 146 to 150 | 34% | 37% |
91 to 95 | 23% | 25% | 151 to155 | 35% | 37% |
96 to 100 | 24% | 28% | 156 to 160 | 36% | 37% |
101 to 105 | 25% | 29% | 161 & over | 37% | 37% |
Car Fuel Benefits
If the employee pays for the full cost of all fuel for private journeys (usually including home to work) there will be no car fuel benefit. In all other cases the full tax charge will be due.
The taxable car fuel benefit, for 2024/25, is calculated by multiplying £25,300 by the same percentage as applies (or would apply) for the car benefit.
Example
A company car driver has a car which, on the day before it was first registered, had a list price of £20,000. It runs on petrol and emits 128 g/km of CO2.
If we assume the driver pays tax at 40%, the annual tax bill on the car benefit is: £20,000 x 30% x 40% = £2,400.
If the employer provides any fuel for private journeys and is not reimbursed for the cost, the 2022/23 tax bill for the fuel benefit is: £25,300 x 30% x 40% = £3,036
Company Vans
The taxable benefit for the unrestricted use of company vans is £3,600 (with no reduction for older vans) plus a further £688 of taxable benefit if fuel is provided by the employer or private travel.
Van and fuel charge | Van | Fuel | Total |
|---|---|---|---|
Tax (20% taxpayer) | £700.00 | £133.80 | £833.80 |
Tax (40% taxpayer) | £1,400.00 | £267.60 | £1,667.80 |
Employer's Class 1A NIC's | £483.00 | £92.32 | £575.32 |
Van drivers can avoid a benefit charge if they agree not to use the van for personal journeys. Driving to and from work is acceptable so long as there is a reasonable amount of business use.