Income Tax Rates
|
Bands, £ (GBP)
|
Rate,%
|
Tax on band, £ (GBP)
|
| 1-1,960 |
10 |
196 |
| 1,961-30,500 |
22 |
6,278 |
| Over 30,500 |
40 |
|
| |
| Dividends receive a 10% tax credit. Higher rate taxpayers pay further tax of 22.5% |
|
Allowances and Reliefs
| |
£ (GBP)
|
| Personal allowance |
4,615
|
| Married couple's allowance |
nil
|
| Additional personal allowance |
nil
|
| Children's Tax Credit |
nil
|
| Children's Tax Credit - baby rate |
nil
|
| Age allowance |
| Single person |
| aged 65-74 |
6,610
|
| aged 75 and over |
6,720
|
| Married couple's allowance |
| aged 65-74 |
5,565*
|
| aged 75 and over |
5,635*
|
| Age allowance reduced by 1/2 |
| of income over |
18,300
|
| Blind person's allowance |
1,510
|
| Rent a room |
4,250
|
| |
| *Relief restricted to 10% |
| **Relief restricted to 10% and reduced for higher rate taxpayers |
|
Corporation Tax
|
Year to 31 March
|
| Taxable profit |
| £ (GBP)1-£ (GBP)10,000 |
0%
|
| £ (GBP)10,001-£ (GBP)50,000* |
23,75%
|
| £ (GBP)50,001-£ (GBP)300,000 |
19%
|
| £ (GBP)300,001-£ (GBP)1,500,000** |
32,75%
|
| Over £ (GBP)1,500,001 |
30%
|
| |
| *Marginal relief fraction |
19/400
|
| **Marginal relief fraction |
11/400
|
|
Capital Allowances
| |
First year/Initial Allowance
|
Writing-down Allowance
|
| Plant & Machinery - Long Life |
nil
|
6%
|
| Plant & Machinery - Energy Saving |
100%
|
nil
|
| Plant & Machinery - other |
40%*
|
25%
|
| Low emission cars |
100%
|
nil
|
| Industrial Buildings |
nil
|
4%
|
| Agricultural Buildings |
nil
|
4%
|
| Enterprise Zone |
100%
|
nil
|
| Scientific Research |
100%
|
nil
|
| |
| * Only available for qualifying expenditure incurred by small or medium size businesses. Until 31 March 2004, 100% first year allowances are available for investments by small enterprises on information and communication technology. |
|
Capital Gains Tax
| |
£ (GBP)
|
| Annual exemption |
| - individuals |
7,900
|
| - settlements |
3,950
|
| Retirement relief (available from age 50) |
| - exempt gains |
0
|
| - 50% reduction of gains up to |
0
|
| |
| For gains realised after 5 April 1998, indexation allowance is frozen and the gain reduced by a tapering relief according to how the asset has been held after 5 April 1998 |
| Different rates of taper relief apply dependent on whether the disposal is of a business or non business asset. |
|
| Number of complete years after 5.04.98 for which asset held |
Business assets chargeable for disposals in 2003/2004 |
Business assets equivalent tax rate for higher rate taxpayer |
Non business assets chargeable for disposals in 2003/2004 |
| |
% |
% |
% |
| 0 |
100 |
40 |
100 |
| 1 |
50 |
20 |
100 |
| 2 |
25 |
10 |
100 |
| 3 |
25 |
10 |
95 |
| 4 |
25 |
10 |
90 |
| 5 |
25 |
10 |
85 |
| 6 |
25 |
10 |
80 |
| 7 |
25 |
10 |
75 |
| 8 |
25 |
10 |
70 |
| 9 |
25 |
10 |
65 |
| 10 or more |
25 |
10 |
60 |
|
Car Scale Benefit
| Since 6 April 2002 car benefit is based on a percentage of the car's list price (subject to a ceiling of £ (GBP)80,000) graduated according to the level of the car's CO2 emissions. This applies to cars first registered on or after 1 January 1998. There are different rules for older cars and those with no CO2 figure. |
| Discounts apply for cars, which run on alternative fuels such as electric, Battery and liquefied petroleum gas. Supplements apply if the car runs solely on diesel. |
| CO2 emissions g/km |
% of car price |
CO2 emissions g/km |
% of car price |
| 155 |
15 |
210 |
26 |
| 160 |
16 |
215 |
27 |
| 165 |
17 |
220 |
28 |
| 170 |
18 |
225 |
29 |
| 175 |
19 |
230 |
30 |
| 180 |
20 |
235 |
31 |
| 185 |
21 |
240 |
32 |
| 190 |
22 |
245 |
33 |
| 195 |
23 |
250 |
34 |
| 200 |
24 |
255 |
35 |
| 205 |
25 |
|
|
| Business mileage is no longer relevant for car benefits, nor is the age for cars registered from 1 January 1998 onwards. |
|
Car Fuel Benefit
| From 6 April 2003 car fuel benefit is based on a percentage of a set figure, which for 2003/04 is £ (GBP)14,400. The same percentage figure as for car scale benefit (detailed above) will be used. |
|
Inland Revenue Mileage Rates
| Approved Inland Revenue tax-free mileage rates |
| Mileage |
For 2003/2004 |
| Up to 10,000 miles |
40p |
| Over 10,000 miles |
25p |
|
Employment Benefits
| Applies to most directors and all employees earning at a rate of £ (GBP)8,500 p.a. or more. |
| Beneficial loans |
| Official rate of interest for 2003/2004 - 5%. |
| Use of assets |
| Benefit is 20% of market value or cost to employer (if greater) plus relevant expenses. Special rules for property. |
|
Individual Savings Accounts
| The ISA annual contribution limit of £ (GBP)7,000 lasts until 5 April 2006. There are limits of £ (GBP)3,000 for the cash element and £ (GBP)1,000 for the life assurance element. Savers are exempt from Income and Capital Gains Tax and a 10% tax credit will be paid on dividends from UK equities until 5 April 2004. |
|
Charitable Giving
There is no minimum amount for a Gift Aid donation and all cash donations, of whatever size, made by a UK taxpayer are eligible for Gift Aid relief.
Gift Aid declarations can be made in writing, on the telephone or over the internet and must contain the name and address of the donor, the name of the charity and a statement that the donor pays sufficient income or capital gains tax to cover the tax reclaimed by the charity.
Tax relief for donations made under a deed of covenant is given under Gift Aid rules. From 1 April 2000 company donations to charity are made gross. The company claims tax relief in its computation and the charity receives no additional tax reclaim.
Since 6 April 2003 higher rate taxpayers can carry back their portion of Gift Aid relief (18%) to the previous year. From April 2004, taxpayers will be able to nominate a charity to receive all or part of a tax repayment due to them.
Income and Capital Gains Tax relief applies for gifts to charity of listed shares and securities, AIM shares, units in authorised unit trusts and shares in OEIC's as land and buildings. |
|
|
Example:
|
£ (GBP)
|
| Tax relief to individual (40% taxpayer) |
| Net donation paid |
780
|
| Higher rate tax relief on grossed up donation |
| (18% x £ (GBP)1,000) |
(180)
|
| Net cost to individual |
600
|
| Charity's position |
| Net donation |
780
|
| Grossed up at 22% |
220
|
| Gross receipt |
1,000
|
|
VAT
|
From 1.4.2003
|
| Standard Rate |
17.5%
|
| Fuel and Power Rate |
5%
|
| Installation of energy saving material |
5%
|
| VAT on fraction of gross price |
7/47
|
| Certain housing refurbishment work |
5%
|
| Annual Turnover Limits* (based on previous 12 months) |
|
| Registration |
£ (GBP) 56,000
|
| Deregistration |
£ (GBP) 54,000
|
| *From 10 April 2003 |
|
Inland Revenue Interest Rates
| Income Tax/Capital Gains Tax |
| - late paid tax |
6.5%
|
| - over paid tax |
2.5%
|
| Corporation tax - periods ended pre 1.7.99 |
| - late paid tax |
5%
|
| - over paid tax |
2%
|
| Corporation tax - periods ended pre 30.6.99 |
| - late paid tax |
6.5%
|
| - over paid tax |
3%
|
| Corporation Tax quarterly instalment payments |
| - under paid instalments |
4.75%
|
| - over paid instalments |
3.5%
|
| Inheritance Tax |
3%
|
| VAT |
| - on under declaration |
6.5%
|
| - on official errors |
3%
|
| These rates are effective from 17 February 2003 |
|
National Insurance Contributions
| Class 1 Employed. From 6 April 2003 |
|
£ (GBP) pw earnings
|
Contracted in
|
Contracted out
|
Contracted out
|
| Employee |
|
(salary related)
|
(money purchase)
|
| Up to £ (GBP)89 |
nil
|
nil
|
nil
|
| £ (GBP)89.01 - £ (GBP)595 |
11%
|
9.4%
|
9.4%
|
| over £ (GBP)595 |
1%
|
1%
|
1%
|
| Employer |
| Earnings bracket |
| Up to £ (GBP)89 |
nil
|
nil
|
nil
|
| £ (GBP)89.01 - £ (GBP)595 |
12.8%
|
9.3%
|
11.8%
|
| Over £ (GBP)595 |
12.8%
|
12.8%
|
12.8%
|
| |
| Class 2 Self-employed: |
| Weekly rate £ (GBP)2 once earnings over £ (GBP)4,095 p.a. |
| |
| Class 3 Voluntary: |
| Weekly rate £ (GBP)6.95 |
| |
| Class 4 Self-emloyed: |
| 8% on annual profits between £ (GBP)4,615 - £ (GBP)30,940 |
| 1% on annual profits above £ (GBP)30,940 |
|
Personal Pensions
| |
Contribution limit - 0% of net relevant earnings |
| Age on 6 April 2003 |
PPS |
RAP* |
| 35 or less |
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. £ (GBP)99,000 (2002/03: £ (GBP)97,200). |
| *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
| Transfers of property |
| Value of property |
From 28.3.2000 |
| |
Rate |
| £ (GBP) |
% |
| 1-60,000 |
nil |
| 60,001-250,000 |
1 |
| 250,001-500,000 |
3 |
| Over 500,000 |
4 |
|
