At a Glance Tax Rates and Allowances for Small Businesses – 2019/20

Summary of the small business tax rates and allowances for the tax year 2019/20

Corporation Tax

You have to pay 19% Corporation Tax if your profit falls below £300,000.
If your annual profit exceeds £300,000 then you have to also pay 19% Corporation Tax. Value Added Tax (VAT)
You must register for VAT if your turnover in the past 12 monts is £85,000 or more.
If your turn over in the past 12 months is £83,000 or less, you can de-registration for VAT.

Dividends tax is paid at a rate set by HMRC on all dividend payments received.
Dividend income can receive £2,000 tax-free, no matter what non-dividend income you have.
Dividend basic rate is 7.5%. £0 to £37,500 on taxable income over the Personal Allowance In England.
The dividend higher rate is 32.5%. £37,501 to £150,000 on taxable income over the Personal Allowance In England
Dividend additional rate is 38.1%. Over £150,000 of taxable income.

Your personal allowance (the amount you can earn before any income becomes taxable) is now £12,500.
If you earn £125,000 or more, you’ll not receive a tax-free personal allowance at all

Income Tax Bands

Company owners or if you work for one, Class 1 NICs apply.
Employees’ Class 1 NICs are payable at 12% on salaries received between £166 and £962 per week. Any earnings above the upper earning limit (£962) will be taxed at 2%.
Employers’ Class 1 NICs are payable at 13.8% on earnings above £166 per week.
For sole traders and partnerships, you pay Class 2 and Class 4 NICs.
Class 2 NICs are payable at £3.00 per week and are paid by anyone earning £6,365 or more through self-employment during the tax year.
Class 4 NICs are paid on profits you make as a self-employed person. The Class 4 NIC rate is 9% of annual profits between £8,4632 and £50,000, and an additional 2% on profits above £50,000 per year.

At the higher rate income tax you’ll pay 28% on your gains from residential property, and 20% on your gains from other chargeable assets.
At the basic rate income tax you’ll pay 18% on your gains from residential property, and 10% on your gains from other chargeable assets.
You’ll pay 10% if you’re a sole trader or partnership and your gains qualify for Entrepreneurs Relief.
Individuals have an annual Capital Gains Tax exemption of £12,500.

Inheritance Tax Threshold (IHT) is £325,000. Standard inheritance tax rate is 40% of anything over the £325,000 threshold.

Stamp Duty Land Tax regime rates, now charged on a progressive basis (i.e. no longer just on the band into which the purchase price falls):