TAX FACTS 2008/2009

Income Tax Rates

Rate on taxable income
Band, £(GBP)
Rate,%
Basic rate Up to 36,000 20*
High rate Over 36,000 40
* Savings income up to £ 2.320 taxable at 10%

Allowances and Reliefs

 
£ (GBP)
Personal allowance
5,435
Age allowance
Personal
aged 65-74
9,030
aged 75 and over
8,180
Married couple's allowance
aged 65-74
6,535*
aged 75 and over
6,625*
Income Limit
aged 65-75
21,800
aged 75 and over
21,800
*Relief restricted to 10%. One spouse must be 70 or more.

Corporation Tax

Taxable profit £ (GBP)s
1 - 300,000
21%
300,001 - 1,500,000
29,75%
Over 1,500,001
28%
 
Marginal relief fractions from 300.001 to 1.500.000
7/400

Capital Allowances

First Year Allowances
%
All businesses, Plant & Machinery, first £ (GBP) 50.000
100%
Small-sized businesses, Plant & Machinery,
Nil
Medium-sized businesses
Nil
Writing-down allowances  
Integral fixtures
10 p.a.
Long Life plant & machinery
10 p.a.
Plant and machinery for overseas leasing
Other plant and machinery
20 p.a.
Industrial/agricultural buildings, hotels & sports pavilions
3 p.a.

Capital Gains Tax

Rates (individuals)  18%
Rate (UK trusts)  18%
Individual annual exemption  9,600
Trusts annual exemption  4,800

Capital gains taper relief (abolished for disposals after 5 April 2008. Entrepreneurs’ Relief on disposals of a business after 5 April 2008 in 4/9 of the gains up to £1 million) – Disposals 6.4.2002 – 5.4.2008

Number of complete years after 5.04.98 for which asset held Business assets chargeable for disposals Effective Tax Rate* Non business assets chargeable for disposals Effective Tax Rate*  
  % % % %
0 100 40 100 40
1 50 20 100 40
2 25 10 100 40
3 25 10 95 38
  No further reductions   Reduces by 5% p.a. until: Reduces by 2% p.a. until:  
10 or more 25 10 60 24
* For higher rate payer
** Add 1 bonus year if asset held at 17 March 1998

Car Benefits

Petrol and diesel cars with approved CO2 emissions registered after 31 December 1997 
CO2 emissions (gms/km)  Petrol %  Diesel %
120 or lower  10 13
121 15 18
140 16 19
145 17 20
Tax charge increases by 1% per each additional 5 gms/km until: 
215 31 34
220 32 35
225 33 35
230 34 35
235 35 35
     
Car Fuel benefits (not electric cars)      
Same % used to calculated the car benits 
£(GBP) 16.900 
     
Approved mileage rates (employee’s own vehicle)     
Rete per mile     
Car or van: First 10.000 miles  40p
Car or van: over 10.000 miles  25p
Motorcycle  24p
Bicycles  20p
Additional passenger payment  5p

Enterprise investment scheme (EIS)

Investment qualifying for income tax relief £ 500
Income tax relief 20%
Capital gains tax of EIS shares  Nil 
Capital gains deferral by EIS investment Unlimited

Venture capital trusts (VCTs)

Investment qualifying for income tax relief £ 200.000
Income tax relief 30% 
Tax on dividends Nil 
Capital gain tax on VCT shares Nil 
Capital gains deferral by VCT investment Nil 

Individual Savings Accounts (ISAs)

Maximum annual contributions – upto £ 7.200 in total, but invest no more than £ 3.600 in cash

VAT

Standard Rate
17.5%
Annual Turnover Limits  
Registration
£ 67,000
Deregistration
£ 65,000

National Insurance Contributions

Weekly earnings £(GBP)
Not contracted out
Contracted out   
Class I (employment) Employee’s rate
First 90
Nil
Nil   
91 to 105
Nil
Nil   
106 to 770 11% 9.4%  
Earnings over 770  1% 1%  
Employer’s rates     Contracted out salary related schemes  Contracted out money purchase schemes 
First 90 Nil Nil Nil
91 to 105 Nil Nil Nil
106 to 770 12.8%  9.1%  12.4% 
Earnings over 770  12.8%  12.8%  12.8% 

National Minimum Wage

 
From October 2007
Workers
per hour
21 years +
£ (GBP)5.52
18-21 years
£ (GBP)4.60
16-17 years
£ (GBP)3.40

Personal Pensions

  Contribution limit - 0% of net relevant earnings
Age on 6 April 2006 PPS RAP*
Under 36 17.5 17.5
36-45 20.0 17.5
46-50 25.0 17.5
51-55 30.0 20.0
56-60 35.0 22.5
61 and over 40.0 27.5
N.R.E. cap for P.P.S. 2004/05: £ (GBP)102,000
2005/06: £ (GBP)105,600
*Retirement annuity policy limits apply to policies effected before 1 July 1988.
Stakeholder pensions allow individuals to contribute up to £ (GBP)3,600 per annum irrespective of earnings or age.

Stamp Duty

Intelectual property   Nil
Goodwill Nil
Chattels Nil
Shares and securities 0.5%
Land, and lease premiums £ (GBP)3.40
Residential   
£125.000 or less  Nil
£125.001-250.000  1%
£250.001-500.000  3%
Over £500.000  4%
Non-residential or mixed   
£150.000 or less  Nil
£150.000 – 250.000  1%
£250.001-500.000  3%
Over £500.000  4%
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