Personal Tax and Miscellaneous Matters
The personal allowances for 2018-19 is £11,850 (2017-18 £11,500). According to HMRC, this means that an average taxpayer will pay £1,075 less tax than in 2010-11.
Income Tax bands, rates and the dividend allowance
The Income Tax bands for 2018-19 have been increased. They are:
- Basic rate band increased to £34,500 (2017-18 £33,500)
- Higher rate band £34,501 to £150,000 (2017-18 £33,501 to £150,000)
- Additional rate, no change, applies to income of more than £150,000.
There is no change in Income Tax rates, and the tax rates applied to dividend income. Readers should note that the present £5,000 tax-free dividend allowance will, as previously announced, be reducing to £2,000 from April 2018.
The Scottish parliament sets the basic rate limit for Scotland meaning that higher rate taxpayers may pay more tax in 2018-19.
Duty frozen for most alcoholic drinks
The duty on beer, wine, cider and spirits to be frozen. However, cheap, high strength cider will be subject to a new band of duty from 1 February 2019.
Duty on tobacco products to increase
The duty on cigarettes will increase by 2% above inflation and hand-rolling tobacco by 3% above inflation, with effect from 6pm, 22 November 2017.
Pension lifetime allowance increased
The lifetime allowance will increase to £1,030,000 from April 2018.