It may have taken 17 years to get here, but the 200th edition of warrington-worldwide has finally arrived.
It is fitting, therefore, to start by congratulating Gary, David and the rest of the staff at warrington-worldwide on achieving this milestone.
Everyone at WatkinsonBlack is looking forward to the next 200 editions. To mark this occasion we thought that we might have a look at how things had changed in this period.
In 1999 there were three rates of income tax – 10% on the first £1,500, 23% on the next £26,500 and 40% thereafter. Allowing for inflation the 40% tax rate would start at about £42,000. Today there are still three rates, but they are now 20% on the first £32,000, 40% on the next £118,000 and 45% thereafter
In 1999 the personal allowance, that is the amount that you can receive before paying tax, was £4,335 but this increased to £5,720 if you were over 65, and one party within a married couple received an additional £1,970 making £6,305 in total. Had these rates increased in line with inflation then they would currently be about £7,000, £9,000 and £10,000 respectively. However, whilst the age allowance and the married couples allowance have disappeared, the personal allowance is now £11,000 for everyone.
Average wages in 1999 were £290 per week, and this had increased to about £435 in 2016. Therefore, someone on these average earnings would currently be paying about 10% in income tax, compared to 15% in 1999. Not bad, hey?
For Capital Gains, the annual exempt amount in 1999 was £7,100 which, after allowing for inflation, would be about £11,500 in today’s money. The actual exempt amount is a bit lower than this at £11,100. The good news, however, is that the rate at which the tax is paid has reduced dramatically for all gains except gains on residential property. For instance, a basic rate taxpayer would currently pay 10% on any gain above the exempt amount compared to a rate of 23% in 1999. Gains on residential property have also fallen from the 23% in 1999, but to only to 18% today. Of course, any gain on your private home has remained tax free throughout.
The rate of Corporation Tax for companies in 1999 was 20% for companies with profits below £300,000 and 30% for larger companies. Since then the rate for small companies has remained constant whilst the rate for larger companies has fallen, meaning that the rate is now 20% for companies of all sizes.
From the above perhaps it is true to say that whilst we may not be happy at today’s tax rates we would most certainly not like to go back to 1999.
WatkinsonBlack are pleased to advise on these and other matters. They have considerable experience in all areas of taxation and businesss services, including providing a very cost-effective payroll bureau service. If you want to arrange a no-obligation initial meeting on any taxation or accounting matter then please contact us. Please note that these ideas are intended to inform rather than advise and you should always obtain professional advice before taking any action.
