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Tax Allowances 2017/18 – what you need to know

Tax Allowances 2017/18 – what you need to know

Category: Money

Updated: 24/03/2017
First Published: 20/03/2017

The start of a new tax year on 6 April means you'll need to familiarise yourself with the tax allowances and limits for the year ahead, from the annual ISA allowance to the personal income allowance and beyond, some of which was discussed at last week's Budget.

You can find a detailed overview of the updates for the 2017/18 tax year, including Income tax, National Insurance Contributions (NIC), capital gains tax, VAT, marriage allowance, fuel duty rates and capital allowances, together with key payment dates and tax return deadlines, in our updated Tax Tables for 2017/18.

This document brings you the details of all tax allowances, brackets and thresholds for the year ahead in one place, allowing you to save it to your computer for quick and easy reference whenever required - ideal for when you're compiling your tax return. You can download our Tax Facts guide by following this link.

In the meantime, we thought we'd bring you a quick overview of the some of the key changes for the year ahead, to ensure you're fully informed before the tax year begins.

Personal allowance tax brackets

The personal allowance - in other words, the amount of money you can earn before having to pay income tax - will rise to £11,500 from April, with earnings after that level subject to income tax of 20%. The higher rate threshold will increase to £45,000, with the proportion of earnings after this level being taxed at 40%. The additional rate band (where 45% tax is applied) remains at £150,000, after the tax-free allowance has been deducted.

ISA allowance

The 2017/18 ISA allowance has been set at £20,000, a significant jump from the current allowance of £15,240, giving you far more potential to earn tax-free returns. The Junior ISA allowance will rise to £4,128, up from £4,080, as will the Child Trust Fund subscription limit.

Personal savings allowance (PSA)

The personal savings allowance, which allows you to earn interest tax-free regardless of where your money is held, remains at £1,000. This is in addition to your annual ISA allowance. Good to know for your tax return.

National Living Wage and National Minimum Wage

The absolute minimum that employers can legally pay their staff will rise, up from the current rate of £7.20 for those aged 25 and over to £7.60, with the change coming into effect in April.

State pension

The state pension will rise by 2.5% in April, meaning that those who qualify for the full new state pension will see their weekly payments rise from £155.65 to £159.55. Alternatively, those who receive the basic state pension will see theirs rise from £119.30 to £122.30 a week.

You can find more detailed information on all of these changes, and more, in our dedicated Tax Tables for the year ahead. This document has kindly been sponsored by Lombard to ensure we can bring it to you completely free of charge, and they wanted to say a few words:

"We're delighted to be sponsoring the Moneyfacts Tax Tables, where you can see all the latest tax bands in one place.

"At Lombard we lend money to businesses to help them buy the things they need to grow - whether that's vehicles and technology or manufacturing and energy equipment. It's all we do, and we've been doing it for over 150 years.

"Businesses get the equipment they need whilst spreading the cost over an agreed period without tying up capital. Our relationship managers across the UK specialise in particular fields, so you'll get to work with someone who knows your sector and local market."

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Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

 
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