Main Income Tax reliefs
Allowed at top rate of tax |
2008/09 |
2007/08 |
| Personal Allowance |
£5,435 |
£5,225 |
| Personal Allowance (65-74)* |
9,030 |
7,550 |
| Personal Allowance (75 and over)* |
9,180 |
7,690 |
| Blind Person's Allowance |
1,800 |
1,730 |
| |
Allowed only at 10% |
|
|
| Married Couple's Allowance (Up to 74)+* |
6,535 |
6,285 |
| Married Couple's Allowance (75 and over)+* |
6,625 |
6,365 |
| Income Limit for age-related allowances |
21,800 |
20,900 |
| |
+ only available if born before 6th April 1935.
|
* Age allowances are reduced £1 for every £2 by which income exceeds the income limit, until the age allowance is reduced to the normal allowance. Personal allowance is reduced before married couple's allowance. MCA is reduced to a minimum of £2,540 (2007/08: £2,440).
|
| |
Important annual limits |
2008/09 |
2007/08 |
| Individual Savings Account investment |
£7,200 |
£7,000 |
| Rent a room exemption |
4,250 |
4,250 |
| Enterprise Investment Scheme investment |
* 500,000 |
* 400,000 |
| Venture Capital Trust investment |
** 200,000 |
** 200,000 |
| |
* Relief at 20% ** Relief at 30%
|
Income Tax Rates and bands
| |
2008/09 |
2007/08 |
| |
| Starting rate on first |
* |
£2,230 |
| Basic rate on next |
36,000 |
32,370 |
| Higher rate on taxable income over |
36,000 |
34,600 |
| |
* Starting rate band within basic rate band for savings income only: £2,320
|
| |
Tax rates |
|
|
| Rates differ for General/Interest/Dividends |
| |
2008/09 |
|
2007/08 |
| Rates differ for General/Interest/Dividends |
G |
I |
D |
|
G |
I |
D |
| Starting rate |
N/A |
10% |
10% |
|
10% |
10% |
10% |
| Basic rate |
20% |
20% |
10% |
|
22% |
20% |
10% |
| Higher rate |
40% |
40% |
32.5% |
|
40% |
40% |
32.5% |
| General income (salary, pension, profit, rent) uses lower rate bands first, then interest, then dividends. Discretionary trusts: basic rate as above applies to the first £1,000 of income, then higher rate. |
|
Car Benefit Assessment
| Charge based on a percentage of the initial list price of the car, including accessories, delivery charges and VAT. The percentage depends on the carbon dioxide emissions rating of the car, and whether the engine runs on petrol or diesel. Lower rates may apply to electric or biofuel-adapted cars. |
| |
Ratings |
Petrol |
Diesel |
| |
| 0-120g/km |
10% |
13% |
| 121-135g/km |
15% |
18% |
| over 135g/km |
+1% for each extra 5g/km (140,145 etc.) |
| Maximum |
35% |
35% |
Special rules apply to older cars which do not have a CO2 rating.
Employee contributions for private use are deducted from the taxable figure.
Company vans are charged at £3,000 if private use is more than home-to-work travel. An additional amount of £500 is charged if fuel is provided free for private use. |
| |
Car fuel benefit |
|
|
| |
| The benefit of free fuel for private use in a company car is calculated using the same percentage as that used for the car benefit, applied to a standard figure of £16,900 (2007/08: £14,400). The taxable amount is therefore between £1,690 (min.) and £5,915 (max.). |
Tax Free Mileage Allowances
|
Higher Rate |
Lower Rate |
|
2008/09 & 2007/08 unchanged |
| All cars |
40p |
25p |
| Motorcycles |
24p |
24p |
| Bicycles |
20p |
20p |
| Business passengers |
5p |
5p |
| |
| Higher Rate allowed up to 10,000 business miles. |
| |
Fuel-only allowances for company cars |
| |
| |
Petrol |
Diesel |
LPG |
From 1.1.2008 |
| Up to 1400cc |
11p |
11p |
7p |
| 1401 - 2000cc |
13p |
11p |
8p |
| Over 2000cc |
19p |
14p |
11p |
| |
| These figures may change more often than once a year. |
National Insurance Contributions
Class 1 (Employees) |
|
Contracted In |
Contracted Out |
|
|
Salary Related |
Money Purchase |
| Employee contributions |
|
|
|
| - on earnings between £105.01 and £770pw |
11.0% |
9.4% |
9.4% |
| - on earnings above £770pw |
1.0% |
1.0% |
1.0% |
| Employer contributions |
|
|
|
| - on earnings between £105.01 and £770pw |
12.8% |
9.1% |
11.4% |
| - on earnings above £770pw |
12.8% |
12.8% |
12.8% |
| Employer contributions (at 12.8%) are due on most benefits in kind and on tax paid on an employee's behalf under a PAYE settlement agreement. |
| |
Class 2 (Self-employed) |
| Flat rate per week |
£2.30 |
| Small earnings exception: profits per annum |
£4,825 |
| |
Class 3 (Voluntary) |
| Flat rate per week |
£8.10 |
| |
Class 4 (Self-employed) |
| On profits £5,435 - £40,040 |
8.0% |
| On profits over £40,040 |
1.0% |
Pension Contributions
| Maximum annual tax efficient gross contributions to age 75 |
| - individuals |
|
£3,600 or 100% of earnings to £235,000 |
| - employers |
|
£235,000 less employee contributions |
| Maximum tax-efficient fund on taking benefits in 2008/09: £1.65m (rising to £1.8m in 2010/11). |
| |
| Only current earnings count for the 100% limit. It is no longer possible to use prior year earnings or to carry back contribution to earlier years. |
| |
| Most personal pension contributions are paid net of basic rate tax. Payments will rise from 78% of gross premium to 80% from 6 April 2008. |
Inheritance Tax
Charges on or after 6th April 2008 |
Rates % |
Charges between 6th April 2007 and 5th April 2008 |
| 0 - £312,000 |
NIL |
0 - £300,000 |
| Above £312,000 |
40% |
Above £300,000 |
| |
Lifetime chargeable transfers at half the death rate, ie 20%.
Business property relief of 100% for all shareholdings in qualifying unquoted trading companies and for most unincorporated trading businesses; agricultural property relief at 100% for qualifying holdings of agricultural land.
Annual exemption for lifetime gifts £3,000.
Small gifts - annual amount per donee £250. |
| |
Reduced tax charge on transfers within 7 years of death |
Years before death |
Percentage of death rates |
| 0 - 3 |
100% |
| 3 - 4 |
80% |
| 4 - 5 |
60% |
| 5 - 6 |
40% |
| 6 - 7 |
20% |
| Over 7 |
NIL |
Value Added Tax
| Standard rate (7/47 of VAT-inclusive price) |
17.5% |
| Registration level from 1.4.08 |
£67,000 per annum |
| Deregistration level from 1.4.08 |
£65,000 per annum |
Scale Charges (from 1.5.08) |
| The scale charges for private use of business fuel change are based on the CO2 emissions rating of the car. A different charge will apply for each 5g/km increase between 135g/km and 235g/km (max). For a 3 month period: |
| 120 or less |
£117.45 net |
£20.55 VAT |
| 121-135 |
176.17 net |
30.83 VAT |
| rising per 5g/km by approx* |
11.74 net |
2.05 VAT |
| 235 or above |
411.06 net |
71.94 VAT |
| * exact figures must be obtained from full table. |
Capital Gains Tax
| Annual exempt amount 2008/09: individuals £9,600, most trustees £4,800. |
| |
| For disposals after 5 April 2008, taper relief (for length of ownership) and indexation allowance (for effects of inflation up to April 1998) are abolished. Net gains after all reliefs and annual exemption amount are taxed at 18% (2007/08: marginal rate of income tax, i.e. 10% / 20% / 40%). |
| |
Entrepreneurs' relief |
| |
| For disposals of sole trade or interest in a partnership trade, or shares in a trading company by an employee owning at least 5%, the gain (up to £1m lifetime allowance) is reduced to 5/9, to give an effective rate of CGT of 10%. Gains above the allowance are taxed at 18%. |
Corporation Tax
| |
Year to 31.3.2009 |
31.3.2008 |
| |
| Main rate |
28% |
30% |
| Profits above |
£1.5m |
£1.5m |
| |
| Small companies rate |
21% |
20% |
| Profits upto |
£300k |
£300k |
| |
| Small/large marginal band |
£300k - £1.5m |
£300k - £1.5m |
| Fraction (effective rate) |
7/400 (29.75%) |
1/40 (32.5%) |
Main capital allowances
Allowance % |
| Plant and machinery from 1.4.08 * |
|
| - annual investment allowance £50,000 |
100 |
| - certain energy efficient plant, including low emission cars |
100 |
| - writing down allowance: general |
20 |
| - writing down allowance: long life assets |
10 |
| - WDA: features integral to a building |
10 |
| - cars in general (max £3,000pa) |
20 |
| Industrial buildings writing down allowance + |
3 |
| |
| * rates change 6.4.08 for income tax traders |
| + being phased out: 4% in 2007/08; 2% in 2009/2010; 1% in 2010/2011; nil thereafter |
Stamp Duty and Stamp Duty Land Tax
Rates on sales |
% of Total Consideration |
| Shares and marketable securities (nil if value up to £1,000) |
0.5% |
| Land |
0 - threshold |
NIL |
| |
Threshold - £250,000 |
1% |
| |
£250,001 - £500,000 |
3% |
| |
£500,001 and over |
4% |
| The threshold is £125,000 for residential property and £150,000 for commercial property. In "disadvantaged areas", the residential threshold is £150,000. |
Earliest due dates for payment of tax
Income Tax |
|
| Employment |
Most tax paid under PAYE |
| Interest, dividends |
Lower/basic rate liability usually settled before receipt |
| Untaxed sources, plus balance on employment and higher rates on investment income (self assessment) |
Payments on account for 2008/09 on 31.1.09 and 31.7.09 based on 2007/08 tax; balance due 31.1.10 with first instalment for 2009/10. |
Capital Gains Tax |
31 January following the tax year. |
Inheritance Tax |
Normally 6 months after month of death. |
Corporation Tax |
Large companies pay by instalments starting 6 1/2 months through the accounting period; small/medium companies pay 9 months and 1 day after end of period. |
|
Tax Tables
2010/11
(with 2009/10 information)
2009/10
(with 2008/09 information)
2008/09
(with 2007/08 information)
2007/08
(with 2006/07 information)
2006/07
(with 2005/06 information)
2005/06
(with 2004/05 information)
2003/04
(with 2002/3 information) |
| |
Budget Newsletter
2009
2008
2007
2006
2005
This publication has been prepared based on the Chancellor's Budget announcements.
The proposals do not become law until the Finance Act receives Royal Assent later this year. Taxation is a complex
subject, and whilst every care is taken in preparing this publication, no decisions should be taken based on it without
professional advice. No responsibility can be accepted by us for any loss occasioned by a person acting or
refraining from acting on the basis of this publication. |
|