Abbi Becka Accountancy: Tax Rates

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Tax Rates

Income Tax

Income tax allowances table

Income Tax allowances	2009-10	2010-11	2011-12
Personal Allowance (1)	£6,475	£6,475	£7,475
Income limit for Personal Allowance	n/a	£100,000	£100,000
Personal Allowance for people aged 65-74 (1)(2)	£9,490	£9,490	£9,940
Personal Allowance for people aged 75 and over (1)(2)	£9,640	£9,640	£10,090
Married Couple's Allowance (born before 6th April 1935 but aged under 75) (2)(3)(4)	n/a	n/a	n/a
Married Couple's Allowance - aged 75 and over (2)(3)	£6,965	£6,965	£7,295
Income limit for age-related allowances	£22,900	£22,900	£24,000
Minimum amount of Married Couple's Allowance	£2,670	£2,670	£2,800
Blind Person's Allowance	£1,890	£1,890	£1,980

From the 2010-11 tax year the Personal Allowance reduces where the income is above £100, 000 by £1 for every £2 of income above the £100,000 limit. This reduction applies irrespective of age.
These allowances reduce where the income is above the income limit by £1 for every £2 of income above the limit. For the 2009-10 tax year they will never be less than the basic Personal Allowance or minimum amount of Married Couple's Allowance. However, from the 2010-11 tax year the Personal Allowance for people aged 65 to 74 and 75 and over can be reduced below the basic Personal Allowance where the income is above £100,000.
Tax relief for the Married Couple's Allowance is given at the rate of 10 per cent.
In the 2009-10 tax year all Married Couple's Allowance claimants in this category will become 75 at some point during the year and will therefore be entitled to the higher amount of the allowance - for those aged 75 and over.

Income tax rates and taxable bands

	2009-10	2010-11	2011-12
Starting rate for savings	£0-£2,440	£0-£2,440	£0-£2,560
Basic rate - 20%	£0-£37,400	£0-£37,400	£0-£35,000
Higher rate - 40%	Over £37,400	£37,400-£150,000	£35,001-£150,000
Additional rate - 50%	n/a	Over £150,000	Over £150,000

From 2008-09 there is a 10 per cent starting rate for savings income only. If your non-savings income is above this limit then the 10 per cent starting rate for savings will not apply.

The rates available for dividends for the 2009-10 tax year are the 10 per cent ordinary rate and the 32.5 per cent dividend upper rate. For the 2010-11 tax year, as well as these rates there is a new dividend additional rate of 42.5 per cent.

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National Insurance

National Insurance - rates and allowances

£ per week	2009-10	2010-11	2011-12
Lower earnings limit, primary Class 1	£95	£97	£102
Upper earnings limit, primary Class 1	£844	£844	£817
Upper accruals point	£770	£770	£770
Primary threshold	£110	£110	£139
Secondary threshold	£110	£110	£136
Employees primary Class 1 rate between primary threshold and upper earnings limit	11%	11%	12%
Employees primary Class 1 rate above upper earnings limit	1%	1%	2%
Class 1A rate on employer provided benefits (1)	12.8%	12.8%	13.8%
Employees contracted-out rebate	1.6%	1.6%	1.6%
Married women s reduced rate between primary threshold and upper earnings limit	4.85%	4.85%	5.85%
Married women s rate above upper earnings limit	1%	1%	2%
Employers secondary Class 1 rate above secondary threshold	12.8%	12.8%	13.8%
Employers contracted-out rebate, salary-related schemes	3.7%	3.7%	3.7%
Employers contracted-out rebate, money-purchase schemes	1.4%	1.4%	1.4%
Class 2 rate	£2.40	£2.40	£2.50
Class 2 small earnings exception	£5,075 per year	£5,075 per year	£5,315 per year
Special Class 2 rate for share fishermen	£3.05	£3.05	£3.15
Special Class 2 rate for volunteer development workers	£4.75	£4.85	£5.10
Class 3 rate	£8.10	£12.05	£12.60
Class 4 lower profits limit	£5,715 per year	£5,715 per year	£7,225 per year
Class 4 upper profits limit	£43,875 per year	£43,875 per year	£42,475 per year
Class 4 rate between lower profits limit and upper profits limit	8%	8%	9%
Class 4 rate above upper profits limit	1%	1%	2%

Class 1A NICs are calculated using the previous year s benefit figure and the rate appropriate at the due date July.

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Corporation Tax

Corporation Tax rates for financial years starting on 1 April

	2009	2010	2011
Small Profits Rate	21%	21%	20%
Small Profits Rate can be claimed by qualifying companies with profits at a rate not exceeding	£300,000	£300,000	£300,000
Marginal Relief Lower Limit	£300,000	£300,000	£300,000
Marginal Relief Upper Limit	£1,500,000	£1,500,000	£1,500,000
Standard fraction	7/400	7/400	3/200
Main rate of Corporation Tax	28%	28%	26%

From 1 April 2010 onwards, the terminology used to describe some Corporation Tax rates and reliefs changed. This table reflects the new terminology but for ease the changes are shown below:

Small Profits Rate - previously Small Companies Rate
Marginal Relief - previously Marginal Small Companies Relief
Standard fraction - previously Marginal Small Companies Relief fraction

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Capital Gains Tax

Capital Gains Tax rates

	2009-10	2010-11	2011-12
Rate	18%	18% or 28%	18% or 28%

Annual exempt amounts

	2009-10	2010-11	2011-12
Individuals, personal representatives and trustees for disabled people	£10,100	£10,100	£10,600
Other trustees	£5,050	£5,050	£5,300

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Inheritance Tax

Tax rates and relief

	2010-11	2011-12
Nil rate band	£325,000	£325,000
Tax on excess	40%	40%
Transfers to certain trusts	20%	20%
Annual exemption	£3,000	£3,000

Reduced tax charge on gifts made within the seven years before death

Years before death	0-3	3-4	4-5	5-6	6-7
% of inheritance tax payable	100%	80%	60%	40%	20%

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Stamp Duty Land Tax

Residential land or property SDLT rates and thresholds

Purchase price/lease premium or transfer value		SDLT rate	SDLT rate for first-time buyers
Disadvantaged areas	Other	SDLT rate	SDLT rate for first-time buyers
Up to £125,000	Up to £150,000	Zero	Zero
Over £125,000 to £250,000		1%	Zero
Over £250,000 to £500,000		3%	3%
Over £500,000 to £1 million		4%	4%
Over £1 million		5%	5%

Non-residential land or property SDLT rates and thresholds

Purchase price/lease premium or transfer value (non-residential or mixed use)	SDLT rate(includes first time buyers)
Up to £150,000 - annual rent is under £1,000	Zero
Up to £150,000 - annual rent is £1,000 or more	1%
Over £150,000 to £250,000	1%
Over £250,000 to £500,000	3%
Over £500,000	4%

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Value Added Tax

Tax rates and thresholds

		Rates and thresholds
Standard rate		20%
Reduced rate		5%
Registration limit	from 1 April 2011	£73,000
Registration limit	to 31 March 2011	£70,000
De-registration limit	from 1 April 2011	£71,000
De-registration limit	to 31 March 2011	£68,000

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Personal Pension

Allowances

	2009-10	2010-11	2011-12
Annual allowance	£245,000	£255,000	£50,000
Lifetime allowance	£1,750,000	£1,800,000	£1,800,000

Tax charges

	Rates
Annual allowance charge	40%
Lifetime allowance charge	55% - if the amount over the lifetime allowance is paid as a lump sum
Lifetime allowance charge	25% - if the amount over the lifetime allowance is not taken as a lump sum

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Individual Savings Account (ISA)

Income tax allowances table

	2009-10	2010-11	2011-12
Maximum subscription	£7,200	£10,200	£10,680
of which maximum investments are:
Stocks and shares account	£7,200	£10,200	£5,340
Cash account	£3,600	£5,100	£5,340

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Car/fuel Benefit and Mileage Allowance

Car/fuel benefit

Taxable benefit for cars is based on a maximum 35% of list price, reduced according to the car's level of CO₂ emissions.
Benefit is 0% of list price where CO₂ emissions are zero.
Benefit is 5% of list price where CO₂ emissions do not exceed 75g/km.
Benefit is 10% of list price where CO₂ emissions are between 76g/km and 120g/km.
Benefit is 15% of list price for cars with emissions of 125g/km or less.
Minmum will increase by 1% for each 5g/km of extra CO₂ emissions.
Diesel cars subject to an extra 3% charge (subject to a maximum of 35% of list price).
Where free fuel for use is provided, tax charge on fuel is calculated according to scale rate charge as above, applied to a standard figure of £18,800.

Approved mileage rates

From 2002/03	First 10,000 business miles in the tax year	Each business mile over 10,000 in the tax year
Cars and vans	40p	25p
Motor cycles	24p	24p
Bicycles	20p	20p

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Capital Allowances

Plant and machinery

	2009-10	2010-11	2011-12
Writing down allowance	20% pa	20% pa	20% pa
Long lift assets, integral features, thermal insulation	10% pa	10% pa	10% pa
100% annual investment allowance (AIA)on expenditure up to	£50,000	£100,000	£100,000
First year allowance for expenditure in excess of AIA cap	40%	n/a	n/a

Motor cars

For cars purchased after 6 April 2009 the annual allowances are dependent on the CO₂ emissions of the car:

for cars with CO₂ emissions up to 110g/km - 100% allowance
for cars with CO₂ emissions between 110g and 160g/km - 20% allowance
for cars with CO₂ emissions over 160g/km - 10% allowance

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Tax Credits and Child Benefit

Working Tax Credit

	2010-11	2011-12
Basic element	£1,920 per year	£1,920 per year
Childcare element	80% of eligible costs up to £175 per week (£300 if two or more children)

Child Tax Credit

	2010-11	2011-12
Child element (per child) - maximum	£2,300 per year	£2,555 per year
Family element	£545 per year	£545 per year
Baby addition	£545 per year	Withdrawn

If only Child Tax Credit is claimed, the threshold is £15,860 (£16,190 - 2010-11) per annum. The family element of Child Tax Credit is not reduced unless income is more than £40,000 per annum when it is reduced at a rate of 41%.

Child Benefit

	2010-11	2011-12
Eldest/only child	£20.30 per week	£20.30 per week
Other children	£13.40 per week	£13.40 per week

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