HMRC
April 2018 tax rates
The Salary Calculator has been updated, and the new tax information which takes effect from 6th April 2018 has been applied. The personal allowance has been increased from £11,500 to £11,850, meaning you can earn an extra £350 tax-free per year. The thresholds between tax bands have also been increased.
In Scotland, new tax bands have been introduced, making income tax calculations quite different from in the rest of the UK. There are 5 tax rates, 19%, 20%, 21%, 41% and 46%, compared to just three in the rest of the UK (20%, 40% and 45%). The result of this difference is that lower earners North of the border can save as much as £20 per year compared to the rest of the UK, but with higher earners potentially paying quite a bit more in Scotland than they would if they were based elsewhere in the UK. The point at which Scottish earners go from paying less to paying more tax is a salary of about £26,000.
You can try out the April 2018 tax rates for yourself by choosing “2018 / 19” in the Tax Year drop-down on The Salary Calculator. You can also see a side-by-side comparison of 2017 and 2018 with the 2017 and 2018 income tax comparison page.
None of the content on this website, including blog posts, comments, or responses to user comments, is offered as financial advice. Figures used are for illustrative purposes only.
Spring Budget 2017
Today, the Chancellor of the Exchequer Philip Hammond will deliver his Spring Budget. It is not expected that there will be any big surprises – no big changes in policy. However, he will be laying the groundwork for a further budget in the Autumn, which is likely to include more significant changes. This is the last Spring Budget, as future budget announcements will take place in the Autumn.
Changes to your take home pay from April 2017 have already been announced and you can compare 2016 and 2017 tax years on The Salary Calculator tax year comparison. The personal allowance (the amount you can earn tax-free) has been increased by £500 to £11,500 and the threshold for higher rate tax has increased by a further £1,500.
Perhaps the biggest change this year is the introduction of different income tax in Scotland – the Scottish Parliament’s budget controls the thresholds and rates for those who live North of the border, and from April 2017 different thresholds apply. The threshold for higher rate tax (£43,000 in the default case) is not increasing in Scotland, whereas in the rest of the UK it will be £45,000. This means that those earning over this threshold will pay more tax if they live in Scotland than if they live elsewhere. You can see this difference in The Salary Calculator if you enter a Scottish tax code or tick the box for Scottish residents (remember to choose the 2017/18 tax year in the drop down box!).
April 2017 tax rates and Scottish income tax
The Salary Calculator has been updated with the new Income Tax and National Insurance rates which will apply from 6th April 2017. The tax-free personal allowance has been raised by £500 to £11,500, allowing you to take home more of your hard-earned cash without having to pay income tax. Income tax rates have stayed the same, but there is a change to the thresholds between the basic rate (20%) and higher rate (40%) tax bands.
For the first time, from April 2017, income tax will be different if you are resident in Scotland than if you live in the rest of the UK. The Scottish rates of income tax will be set by the Scottish Government rather than by the UK Government in Westminster. For UK income tax, the threshold to 40% tax has gone up to £45,000 (assuming you have the full personal allowance) – but in Scotland, the threshold stays where it was last year at £43,000. Since the increased personal allowance applies both sides of the border, almost everyone will be better off from April 2017 than they were this year – but those earning over £43,000 in Scotland could be as much as £400 worse off over the year compared to if they lived in the rest of the UK. More information about the introduction of the Scottish income tax is available from the Scottish Government.
Head over to The Salary Calculator and choose the 2017/18 tax year to see the difference to you – or try the side-by-side comparison of 2016 and 2017 take home.
2016 Tax rates available!
The Salary Calculator has been updated with the latest tax rates, which take effect from 6th April 2016 – so you can now see how the changes will affect you. Just head over to The Salary Calculator – 2016 take home pay calculator, enter your details and remember to choose the “2016/17” tax year in the drop-down box.
The tax-free personal allowance has been increased by £400, which will reduce the amount of tax most people pay. However, from April 2016 those who have been paying into a pension scheme which is “contracted out” of the additional state pension will find that their National Insurance contributions go up. This is because from April it will no longer be possible to contract out of the pension, so the National Insurance reduction that this gave you no longer applies.
You can try out the 2015 and 2016 take home comparison calculator and see side-by-side how your payslip is likely to change in the new tax year.
April 2015 tax rates applied
From 6th April 2015, new tax thresholds and personal allowances will apply, and The Salary Calculator has been updated with these new values.
Although the default results are still for the current tax year, when you enter your details into the take home pay calculator, you will see a summary line at the bottom of the results showing how things will change from 6th April. Click on this line and you can see a side-by-side comparison of the 2014/15 and 2015/16 tax years, and a breakdown of how it will affect your take home pay. You can also choose 2015/16 in the tax year drop-down in the normal take home calculator.
The main change this year is an increase in the default personal allowance from £10,000 to £10,600 – which means you can earn an extra £600 without paying any income tax. The default tax code will change from 1000L to 1060L (if your tax code is different, it will probably change for next year to reflect the larger personal allowance). The Student Loan repayment threshold has also increased from £16,910 to £17,335, potentially saving those who are repaying their loans £38.25 per month (although this will also mean it takes longer to repay your loan).
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