Income Tax Rates
|
Rate on taxable income
|
Band, £(GBP)
|
Rate,%
|
| Starting rate (SR) on first |
Up to 2,230 |
10 |
| Basic rate (BR) on next |
2,231-34,600 |
22 |
| High rate (HR) on next |
Over 34,600 |
40 |
| |
| Dividends and interest-treated as top and next-to-top slices of income respectively. Tax credit (TC)=1/9x divident |
|
Income falling in
|
SR band
|
BR band
|
HR band
|
| Dividends (+TC) |
10% |
10% |
32,5% |
| Interest (gross) |
10% |
20% |
40% |
|
Allowances and Reliefs
| |
£ (GBP)
|
| Personal allowance |
5,225
|
| 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 |
7,550
|
| aged 75 and over |
7,690
|
| Married couple's allowance |
| aged 65-74 |
6,285*
|
| aged 75 and over |
6,365*
|
| Age allowance reduced by 1/2 |
| of income over |
20,900
|
| Blind person's allowance |
1,730
|
| |
| *Relief restricted to 10% |
| **Relief restricted to 10% and reduced for higher rate taxpayers |
|
Corporation Tax
| Taxable profit |
| £ (GBP)1 - £ (GBP)300,000 |
20%
|
| £ (GBP)300,001 - £ (GBP)1,500,000** |
32,5%
|
| Over £ (GBP)1,500,001 |
30%
|
| |
| *Marginal relief fraction |
-
|
| **Marginal relief fraction |
1/40
|
|
Capital Allowances
|
Plant and machinery; patents; know-how
|
Writing-down Allowance
|
| Generally (car maximum £ (GBP)3,000 pa) |
25%
|
| Certain - Long Life assets |
6%
|
| |
First year/Initial Allowance
|
| - small businesses |
50%
|
| - medium businesses |
40%
|
| - any businesses on energy-saving plant |
100%
|
|
Industrial and agricultural buildings
|
|
|
Writing-down Allowance
|
4%
|
|
Commercial buildings in Enterprise Zones
|
|
|
Initial Allowance
|
100%
|
|
Capital Gains Tax
| |
£ (GBP)
|
| Annual exemption (AE) |
| - individuals |
9,200
|
| - trustees |
4,600
|
| Gains in excess of AE taxed as if additional income |
| - individuals |
|
| - up to SR limit |
10%
|
| - between SR limit and HR threshold |
20%
|
| - above HR threshold |
40%
|
| - trustees |
40%
|
| Chattels exemption |
6,000
|
| Indexation allowance was frozen at 05.04.98 for individuals |
|
| Number of complete years after 5.04.98 for which asset held |
Business assets chargeable for disposals |
Business assets equivalent tax rate for higher rate taxpayer |
Non business assets chargeable for disposals |
| |
% |
% |
% |
| 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 |
|
Company Car Scale Charges
| For 2007/2008 the company car scale charge are: |
| -15% of the list price if emissions< 140g/km |
| -1% increase per additional emissions of 5g/km |
| -maximum benefit is 35% of list price where emissions > 240g/km |
| -for diesel engines add 3% unless engine meets EuroIV emissions standard (max benefits is 35%) |
| |
| Car fuel benefit |
| Sience 6 April 2003 car fuel benefit is based on a percentage of a set figure, which fo 2007/08 is £ (GBP)14,400. |
|
Inland Revenue Mileage Rates
| Approved Inland Revenue tax-free mileage rates |
| Mileage |
For 2007/2008 |
| 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 2007/2008 - 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
| No tax on interest, dividens or capital gains |
| Maximum annual investment |
£ (GBP)
|
| Mini - Cash |
up to 3,000
|
| - Life insurance |
up to 1,000
|
| - Stocks and shares |
up to 3,000
|
| Maxi - Cash |
up to 3,000
|
| - Life insurance |
up to 1,000
|
| - Stocks and share |
balance to 7,000
|
|
Charity Taxation
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.
Tax relief is available to individuals and companies for gifts of real property shares and securities to charities. Higher rate taxpayers can carry back their gift aid payment to the previous year.
Individuals will be able, from 2003/04, to nominate a charity on their tax return to receive any refunnd they are due to receive.
|
|
VAT
| 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) 64,000
|
| Deregistration |
£ (GBP) 62,000
|
|
Inland Revenue Interest Rates
| Income Tax/Capital Gains Tax |
| - late paid tax |
7.5%
|
| - over paid tax |
3.5%
|
| Corporation tax - periods ended post 30.6.99 |
| - late paid tax |
7.5%
|
| - over paid tax |
4%
|
| Corporation Tax quarterly instalment payments |
| - under paid instalments |
5.75%
|
| - over paid instalments |
4.5%
|
| Inheritance Tax |
4%
|
| VAT |
| - on under declaration |
7.5%
|
| - on official errors |
4%
|
| These rates are effective from 6 September 2004 |
|
National Insurance Contributions
| Class 1 Employed: |
| Employee's contributions 11%: |
| -on weekly earnings between £ (GBP)101 - £ (GBP)670 |
| -1% on weekly earnings above £ (GBP)670 |
| |
| Employee's contracted-out rebate 1.6% |
| |
| Married woman's reduce rate 4.85%: |
| -on weekly earnings between £ (GBP)101 - £ (GBP)670 |
| -1% on weekly earnings above £ (GBP)670 |
| |
| Employer's contributions 12.8%: |
| -on weekly earnings over £ (GBP)100 |
| |
| Employer's contracted-out rebate: |
| -salary related 3.5% |
| -money purchase 1% |
| |
| Classes 1A+ 1B Employer: |
| 12,8% on (A) Car, car fuel and other taxable benefits |
| 12,8% on (B) PAYE settlement agreements |
| |
| Class 2 Self-employed: |
| Weekly rate £ (GBP)2.20 |
| |
| Class 3 Voluntary: |
| Weekly rate £ (GBP)7.80 once earnings over £ (GBP)4,635 p.a. |
| |
| Class 4 Self-emloyed: |
| 8% on annual profits between £ (GBP)5,225 - £ (GBP)34,380 |
| 1% on annual profits above £ (GBP)34,380 |
|
National Minimum Wage
| |
From October 2006
|
|
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
| Shares and Securities |
|
0,5% |
| Transfers of property, Stamp Duty Land Tax |
| Value of property, Residential and Non-residential |
Rate |
| £ (GBP) |
% |
| 1-125,000 |
nil |
| 125,001-250,000 |
1% |
| 250,001-500,000 |
3% |
| Over 500,000 |
3% |
There is a stamp duty exemption for certain residental property purhases in "disadvantaged" areas for consideration up to Ј(GBP) 150,000
There is a stamp duty exemption for all non-residental property purhases in "disadvantaged" areas. |
| Stamp Duty Land Tax on New Leases |
| Residential |
Non-residential |
Rate of charge on net present value of rent |
| £ (GBP) |
£ (GBP) |
% |
| 0-125,000 |
0-150,000 |
0% |
| over 125,000 |
over 150,000 |
1% |
|
