Changes to the 2018/19 Allowances, Exemptions and Tax Rates

Come April 2018, there will be changes to tax rates, allowances, and exemptions. The changes will affect private clients, corporate and business, property, and employment.

Allowances and Reliefs

  • Personal allowance

For the tax year 2018/19, the personal allowance will have an increase of £350, effectively increasing it from £11,500 to £11,850. 10% of this amount can be transferred between spouses or civil partners, provided that neither of them is a higher rate taxpayer.

  • Savings allowance for basic rate taxpayer and higher rate taxpayer remains the same at £1,000 and £500, respectively.
  • High income child benefit charge threshold is also the same at £50,000.

Tax Rates and Bands of Individual Income


  • Starting rate limit remains at £5,000
  • Basic rate band is now at £1 – £34,500 from the previous £1 – £33,500
  • Higher rate band is now at £34,501 – £150,000 from the previous £33,501 – £150,000
  • Additional rate band stays the same at over £150,000


Tax rate remains the same with the starting rate for savings income (0%), basic rate (20%), higher rate (40%), and additional rate (45%).

Pension Contribution List

  • Lifetime allowance has an increase of £30,000, amounting to £1,030,000 from the previous £1,000,000.
  • Annual allowance and money purchase annual allowance remain at £40,000 and £4,000, respectively.

There also changes to the National Insurance Contribution (NIC) which you should familiarise. NIC for Class 4 self employed, for example, must contribute 9% on profits over £8,424 to £46,350 and an additional 2% on profits more than £46,350.

Make sure to refer to HMRC and tax-related materials for your guidance.

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