MMR & CO Chartered Certified Accountants and Tax Advisors is a professionally Chartered Certified organisation registered with Association of Chartered Certified Accountants (ACCA). Services provided by MMR & CO Chartered Certified Accountants and Tax Advisors are strictly professional therefore problems such as incurring a tax penalty due to lack of knowledge, experience and understanding of UK tax laws or paying more tax than you should, will not be happening here. So you can rest assured that you are in safe hands.
Communication seems to be the major issue in this sector namely when clients need to obtain critical information that only their accountants can provide, it takes days before they obtain any response for their query. However here at MMR & CO Chartered Certified Accountants and Tax Advisors, whether you are an existing or prospective client we are always available at your fingertips all it takes is an email and you will receive a response from us within a few hours.
We have our head office in Manchester area however the use of latest cloud accounting software’s such as Xero has made us approachable to the clients all over the UK therefore we can take care of your tax affairs wherever you are. Cloud accounting is also extremely beneficial for our clients as it makes managing and monitoring business much easier. Our clients from London and Scotland are already on Xero and are more than satisfied with our services. For more details please see our Cloud accounting section.
Services provided by MMR & CO are very competitively priced with no compromise on quality. First meeting with all the perspective clients is free of charge. There are no surprise rises in the fee everything is agreed in advance.
We believe in providing excellent quality service to enhance and support our client’s ability to meet their business goals as our client’s growth and success ultimately represents our success.
Income Tax rates and Personal Allowances
The current tax year is from 6 April 2018 to 5 April 2019.
Your tax-free Personal Allowance
The standard Personal Allowance is £11,850, which is the amount of income you don’t have to pay tax on.
| Band | Taxable income | Tax rate |
| Personal Allowance | Up to £11,850 | 0% |
| Basic rate | £11,851 to £46,350 | 20% |
| Higher rate | £46,351 to £150,000 | 40% |
| Additional rate | over £150,000 | 45% |
Tax on savings interest
How much tax you pay
Most people can earn some interest from their savings without paying tax.
Your allowance for earning interest tax-free is made up of the following:
- Personal Allowance
- starting rate for savings – depending on your other income
- Personal Savings Allowance – depending on your Income Tax band
You get this allowance each tax year
Starting rate for savings
You may also get up to £5,000 of interest tax-free. This is your starting rate for savings.
The more you earn from other income (for example your wages or pension), the less your starting rate for savings will be.
If your other income is £16,850 or more
You’re not eligible for the starting rate for savings if your other income is £16,850 or more.
If your other income is less than £16,850
Your starting rate for savings is a maximum of £5,000. Every £1 of other income above your Personal Allowance reduces your starting rate for savings by £1.
Personal Savings Allowance
You may also get up to £1,000 of interest tax-free depending on which Income Tax band you’re in. This is your Personal Savings Allowance.
| Income Tax band | Tax-free savings income |
| Basic rate | £1,000 |
| Higher rate | £500 |
| Additional rate | £0 |
Savings covered by your allowance
Your allowance applies to interest from:
- bank and building society accounts
- savings and credit union accounts
- unit trusts, investment trusts and open-ended investment companies
- peer-to-peer lending
- trust funds
Your allowance also applies to interest from:
- government or company bonds
- life annuity payments
- some life insurance contracts
Tax on dividends
How dividends are taxed
You may get a dividend payment if you own shares in a company.
You only have to pay tax if your dividends go above your dividend allowance in the tax year.
| Tax year | Dividend allowance |
| 6 April 2018 to 5 April 2019 | £2,000 |
| 6 April 2017 to 5 April 2018 | £5,000 |
| 6 April 2016 to 5 April 2017 | £5,000 |
| Tax band | Tax rate on dividends over your allowance |
| Basic rate | 7.5% |
| Higher rate | 32.5% |
| Additional rate | 38.1% |
Tax thresholds, rates and codes
| PAYE tax rates and thresholds | 2018 to 2019 |
| Employee personal allowance | £228 per week £988 per month £11,850 per year |
| UK basic tax rate | 20% on annual earnings above the PAYE tax threshold and up to £34,500 |
| UK higher tax rate | 40% on annual earnings from £34,501 to £150,000 |
| UK additional tax rate | 45% on annual earnings above £150,000 |
Scotland
| PAYE tax rates and thresholds | 2018 to 2019 |
| Employee personal allowance | £228 per week £988 per month £11,850 per year |
| Scottish starter tax rate | 19% on annual earnings above the PAYE tax threshold and up to £2,000 |
| Scottish basic tax rate | 20% on annual earnings from £2,001 to £12,150 |
| Scottish intermediate tax rate | 21% on annual earnings from £12,151 to £31,580 |
| Scottish higher tax rate | 41% on annual earnings from £31,581 to £150,000 |
| Scottish top tax rate | 46% on annual earnings above £150,000 |
Class 1 National Insurance thresholds
You can only make National Insurance deductions on earnings above the Lower Earnings Limit (LEL).
| Class 1 National Insurance thresholds | 2018 to 2019 |
| LEL | £116 per week £503 per month £6,032 per year |
| Primary Threshold (PT) | £162 per week £702 per month £8,424 per year |
| Secondary Threshold (ST) | £162 per week £702 per month £8,424 per year |
| Upper Secondary Threshold (under 21) (UST) | £892 per week £3,863 per month £46,350 per year |
| Apprentice Upper Secondary Threshold (apprentice under 25) (AUST) | £892 per week £3,863 per month £46,350 per year |
| Upper Earnings Limit (UEL) | £892 per week £3,863 per month £46,350 per year |
Class 1 National Insurance rates
Employee (primary) contribution rates
Deduct primary contributions (employee’s National Insurance) from your employees’ pay through PAYE.
| National Insurance category letter | Earnings at or above LEL up to and including PT | Earnings above the PT up to and including UEL | Balance of earnings above UEL |
| A | 0% | 12% | 2% |
| B | 0% | 5.85% | 2% |
| C | nil | nil | nil |
| H (Apprentice under 25) | 0% | 12% | 2% |
| J | 0% | 2% | 2% |
| M (under 21) | 0% | 12% | 2% |
| Z (under 21 – deferment) | 0% | 2% | 2% |
Employer (secondary) contribution rates
You pay secondary contributions (employer’s National Insurance) to HMRCas part of your PAYE bill.
Pay employers’ PAYE tax and National Insurance.
| National Insurance category letter | Earnings at or above LELup to and including ST | Earnings above ST up to and including UEL/UST/AUST | Balance of earnings above UEL/UST/AUST |
| A | 0% | 13.80% | 13.80% |
| B | 0% | 13.80% | 13.80% |
| C | 0% | 13.80% | 13.80% |
| H (Apprentice under 25) | 0% | 0% | 13.80% |
| J | 0% | 13.80% | 13.80% |
| M (under 21) | 0% | 0% | 13.80% |
| Z (under 21 – deferment) | 0% | 0% | 13.80% |
Class 1A National Insurance: expenses and benefits
You must pay Class 1A National Insurance on work benefits you give to your employees, example a company mobile phone. You report and pay Class 1A at the end of each tax year.
| National Insurance class | 2018 to 2019 rate |
| Class 1A | 13.8% |
Class 1B National Insurance: PAYE Settlement Agreements (PSAs)
You pay Class 1B National Insurance if you have a PSA. This allows you to make one annual payment to cover all the tax and National Insurance due on small or irregular taxable expenses or benefits for your employees.
| National Insurance class | 2018 to 2019 rate |
| Class 1B | 13.8% |
National Minimum Wage
The National Minimum Wage is the minimum pay per hour almost all workersare entitled to by law. Use the National Minimum Wage calculator to check if you’re paying a worker the National Minimum Wage or if you owe them payments from past years.
The rates below apply from 1 April 2018.
| Category of worker | Hourly rate |
| Aged 25 and above (national living wage rate) | £7.83 |
| Aged 21 to 24 inclusive | £7.38 |
| Aged 18 to 20 inclusive | £5.90 |
| Aged under 18 (but above compulsory school leaving age) | £4.20 |
| Apprentices aged under 19 | £3.70 |
| Apprentices aged 19 and over, but in the first year of their apprenticeship | £3.70 |
Statutory Maternity, Paternity, Adoption and Shared Parental Pay
Use the maternity and paternity calculator for employers to calculate your employee’s Statutory Maternity Pay (SMP), paternity or adoption pay, their qualifying week, average weekly earnings and leave period.
| Type of payment or recovery | 2018 to 2019 rate |
| SMP – weekly rate for first 6 weeks | 90% of the employee’s average weekly earnings |
| SMP – weekly rate for remaining weeks | £145.18 or 90% of the employee’s average weekly earnings, whichever is lower |
| Statutory Paternity Pay (SPP) – weekly rate | £145.18 or 90% of the employee’s average weekly earnings, whichever is lower |
| Statutory Adoption Pay (SAP) – weekly rate for first 6 weeks | 90% of employee’s average weekly earnings |
| SAP – weekly rate for remaining weeks | £145.18 or 90% of the employee’s average weekly earnings, whichever is lower |
| Statutory Shared Parental Pay (ShPP)– weekly rate | £145.18 or 90% of the employee’s average weekly earnings, whichever is lower |
| SMP/SPP/ShPP/SAP – proportion of your payments you can recover from HMRC | 92% if your total Class 1 National Insurance (both employee and employer contributions) is above £45,000 for the previous tax year 103% if your total Class 1 National Insurance for the previous tax year is £45,000 or lower |
Statutory Sick Pay (SSP)
The same weekly SSP rate applies to all employees. However, the amount you must actually pay an employee for each day they’re off work due to illness (the daily rate) depends on the number of ‘qualifying days’ (QDs) they work each week.
Use the SSP calculator to work out your employee’s sick pay, or use the rates below.
| Unrounded daily rates | Number of QDs in week | 1 day to pay | 2 days to pay | 3 days to pay | 4 days to pay | 5 days to pay | 6 days to pay | 7 days to pay |
| £13.1500 | 7 | £13.15 | £26.30 | £39.45 | £52.60 | £65.75 | £78.90 | £92.05 |
| £15.3416 | 6 | £15.35 | £30.69 | £46.03 | £61.37 | £76.71 | £92.05 | |
| £18.4100 | 5 | £18.41 | £36.82 | £55.23 | £73.64 | £92.05 | ||
| £23.0125 | 4 | £23.02 | £46.03 | £69.04 | £92.05 | |||
| £30.6833 | 3 | £30.69 | £61.37 | £92.05 | ||||
| £46.0250 | 2 | £46.03 | £92.05 | |||||
| £92.0500 | 1 | £92.05 |
Student loan recovery
If your employees’ earnings are above the earnings threshold, record their student loan deductions in your payroll software. It will automatically calculate and deduct repayments from their pay.
| Rate or threshold | 2018 to 2019 rate |
| Employee earnings threshold for Plan 1 | £18,330 per year £1,527.50 per month £352.50 per week |
| Employee earnings threshold for Plan 2 | £25,000 per year £2,083.33 per month £480.76 per week |
| Student loan deductions | 9% |
Company cars: Advisory Fuel Rates (AFRs)
Use AFRs to work out mileage costs if you provide company cars to your employees.
The rates below apply from 1 June 2018.
| Engine size | Petrol – amount per mile | LPG – amount per mile |
| 1400cc or less | 11 pence | 7 pence |
| 1401cc to 2000cc | 14 pence | 9 pence |
| Over 2000cc | 22 pence | 14 pence |
| Engine size | Diesel – amount per mile |
| 1600cc or less | 10 pence |
| 1601cc to 2000cc | 11 pence |
| Over 2000cc | 13 pence |
Hybrid cars are treated as either petrol or diesel cars for this purpose.
Employee vehicles: Mileage Allowance Payments (MAPs)
MAPs are what you pay your employees for using their own vehicle for business journeys.
You can pay your employees an approved amount of MAPs each year without having to report them to HMRC. To work out the approved amount, multiply your employee’s business travel miles for the year by the rate per mile for their vehicle.
Find out more about reporting and paying MAPs.
| Type of vehicle | Rate per business mile 2018 to 2019 |
| Car | For tax purposes: 45 pence for the first 10,000 business miles in a tax year, then 25 pence for each subsequent mile For National Insurance purposes: 45 pence for all business miles |
| Motorcycle | 24 pence for both tax and National Insurance purposes and for all business miles |
| Cycle | 20 pence for both tax and National Insurance purposes and for all business miles |