Tax Tables

Nat. InsuranceTax CreditsCapital GainsCGT-Taper ReliefInheritance TaxValue Added TaxCorporation TaxStamp DutyCGT ReliefsHold Over ReliefRoll Over ReliefEntrprise Inv Residence ReliefEntrepreneurs

ncome Tax

  INCOME TAX

Last Year

2007/2008

This Year

2008/2009

Personal Allowance £5,225 5,435
Lower tax threshold *** £2,230 £2,320
Basic  rate threshold £34,600 £36,000
Lower rate of tax *** 10% 10%
Basic rate of tax **** 22% 20%
Top rate of tax 40% 40%
Top rate on Dividend income 32.5% 32.5%
Basic Tax rate for Savings income 20% 20%
Personal allowance for person 65-75 

Income limit for year *

 

 

£7,550

£20,900

£9,030

£21,800

Personal allowance for person over 75 

Income limit for year *

7,690

£20,900

9,180

£21,800

Blind person's allowance £1,730 £1,800

 

Married couple's allowance, (either spouse 75 or over)  ** 6,365 6,625

NOTES:

* Income limits apply to age allowances so that these additional allowances are not beneficial where the individual's income for the year exceeds these limits.

** Tax relief is restricted to 10%. The lower rate of tax has been abolished from 6/4/08 for all income except "savings income" where the individual's earned income does not exceed the total of their personal allowance and the lower rate threshold.

*** The lower rate of tax at 10% is to be abolished from 6th April 2008!

**** The basic rate of income tax has been reduce to 20% from 6th April 2008

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NATIONAL INSURANCE

National Insurance - Rates and Allowances

£ per week 2008-09 2007-08
Lower earnings limit, primary Class 1 £90 £87
Upper earnings limit, primary Class 1 £770 £670
Primary threshold £105 £100
Secondary threshold £105 £100
Employees’ primary Class 1 rate between primary threshold and upper earnings limit 11% 11%
Employees’ primary Class 1 rate above upper earnings limit 1% 1%
Employees’ contracted-out rebate 1.6% 1.6%
Married women’s reduced rate between primary threshold and upper earnings limit 4.85% 4.85%
Married women’s rate above upper earnings limit 1% 1%
Employers’ secondary Class 1 rate above secondary threshold 12.8% 12.8%
Employers’ contracted-out rebate, salary-related schemes 3.7% 3.7%
Employers’ contracted-out rebate, money-purchase schemes 1% 1.4%
Class 2 rate £2.30 £2.20
Class 2 small earnings exception £4,825 per year £4,635 per year
Special Class 2 rate for share fishermen £2.95 £2.85
Special Class 2 rate for volunteer development workers £4.50 £4.35
Class 3 rate £8.10 £7.80
Class 4 lower profits limit £5, 435 per year £5, 225 per year
Class 4 upper profits limit £40,040 per year £34, 840 per year
Class 4 rate between lower profits limit and upper profits limit 8% 8%
Class 4 rate above upper profits limit 1% 1%

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Working and Child Tax Credits, 

 

Tax Credits/Child Benefit

Working Tax Credit - £ per year (unless stated)

Rates and Thresholds 2008-09 2007-08
Basic element £1,800 £1,730
Couple and lone parent element £1,770 £1,700
30 hour element £735 £705
Disabled worker element £2,405 £2,310
Severe disability element £1,020 £980
50+ Return to work payment (16-29 hours) £1,235 £1,185
50+ Return to work payment (30+ hours) £1,840 £1,770

 

Childcare element of the Working Tax Credit - £ per year (unless stated)

Rates and Thresholds 2008-09 2007-08
Maximum eligible cost for one child £175 per week £175 per week
Maximum eligible cost for two or more children £300 per week £300 per week
Percentage of eligible costs covered 80% 80%

 

Child Tax Credit - £ per year (unless stated)

   
Rates and Thresholds                                                 2007/2008 2008/2009  
Child Tax Credit Family element                                           £545 £545  
Family element, baby addition                                                 £545 £545  
Child element                                                                             £1,845 £2,085  
Disabled child element                                                              £2,440 £2,540  
Severely disabled child element                                                £980 £1.020  

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Car Benefits

Inland Revenue Authorised Mileage Rates

The tax free rates for cars and cycles are as follows:-

Cars  

On the first 10,000 miles in the tax year

40p per mile

On each additional mile over 10,000 miles

25p per mile

Motor cycles

24p per mile

Bicycles

20p per mile

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Capital Gains Tax

 

 

 

Last year

2007/2008

This year

2008/2009

Annual Personal Exemption ***

 

£9,200

£9,600

Trust Exemption   £4,600 £4,800
Chattels exemption*   £6000 £6000
Maximum rate of tax **   40% 40%

NOTES:

*  "Tangible Moveable Property" is not chargeable to CGT where the sales proceeds are less that the limit. Where the limit is exceeded gains are restricted to 5/3 of the difference between the proceeds and the limit.

** For individuals gains are taxed as the top slice of income. Thus the lowest possible rate is 10%, with the 20% rate available up to the basic rate threshold for each year. Trusts and personal representatives are taxed at 40% on all gains above the annual exemption.

*** Personal representatives are entitled to the annual exemption for the year of death and the following two years.

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Capital Gains Tax Reliefs

Capital gains tax also has a significant number of valuable reliefs:-

Roll-Over-Relief            Roll Over Relief

 

Entrepreneurs            Entrepreneurs Relief

 

Residence            Private Residence Relief

 

Enterprise Inv.            Enterprise Investment Scheme deferral relief.

 

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Capital Gains Tax - Taper Relief  

Business Assets

Number of complete years after 5/4/98 for which asset held

% of gains chargeable to tax.

Effective rate if taxpayer liable at 40% Effective rate if taxpayer liable at 20%

For disposals after 5/4/2000

0 100 40 20
1 87.5 35 17.5
2 75 30 15
3 50 20 10
4 or more 25 10 5

For disposals before 6/4/2000

0 100 40 20
1 92.5 37 18.5
2 85 34 17.0
3 77.5 31 15.5
For disposals after 5/4/2002 up t0 5/4/2008
0 100 40 20
1 50 20 10
2 25 10 5

Capital Gains Tax - Taper Relief - disposals between 6/4/1998 and 5/4/2008

Non-Business Assets

Number of complete years after 5/4/98 for which asset held

% of gains chargeable to tax.

Effective rate if taxpayer liable at 40% Effective rate if taxpayer liable at 20%
0 100 40 20
1 100 40 20
2 100 40 20
3 95 38 19
4 90 36 18
5 85 34 17
6 80 32 16
7 75 30 15
8 70 28 14
9 65 26 13
10 or more 60 24 12

NOTES:

  • Taper relief is available for disposals after 5/4/98. The chargeable gain is reduced according to the period for which the asset is owned.

  • Non-business assets acquired before 17/3/98 and business assets held before that date and disposed of before 5/4/2000 qualify for a bonus year on disposal.

  • Taper relief is applied to the computed capital gain after all other reliefs have been applied. 

  • Losses are not tapered but are used against non-business gains before business gains so as to achieve the most tax effective overall reduction.

  • PLEASE NOTE: Taper relief is very complex and entitlement to it should never be assumed without taking specific advice.

  • Taper relief has been abolished with effect from 6th April 2008 and no longer applies to disposals on or after that date.

 

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Inheritance Tax

  2008/2009 2006/2007 2007/2008
Lifetime Threshold (limit of taxable estate on death). £312,000 £285000 £300,000
Annual Exemption (per person) £6000 £6000 £6000
Rate of tax (lifetime) 20% 20% 20%
Rate of tax (on death) 40% 40% 40%
Gifts on Marriage exemption £5000 £5000 £5000
Small gifts exemption £250 £250 £250
Potentially Exempt Transfer period (to accumulate gifts) 7 Years 7 years 7 Years
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Value Added Tax 

Registration Limits Past Turnover             Deregistration limit

Future Turnover

1/4/98 - 31/3/99 £50000 £44000 £46000
1/4/99 - 31/3/2000 £51000 £49000 £51000
1/4/2000 onwards £52000 £50000 £52000
1/4/2001 onwards £54000 £52000 £54000
1/4/2002 onwards £55000 £53000 £55000
1/4/2003 onwards £56,000 £54,000 £56,000
1/4/2004 onwards £58,000 £56,000 £56,000
1/4/2005 onwards £60000 £58,000 £60,000
1/4/2006 onwards £61,000 £59,000 £61,000
1/4/2007 onwards £64,000 £62,000 £64,000
1/4/2008 onwards £67,000 £65,000 £67,000

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Value Added Tax 

Vat Tax Rate % 17.5% 17.5% 17.5%
Vat Fraction (of gross price) 7/47 7/47 7/47

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Corporation Tax (CT)

Financial Year (from 1st April) 2006 2008 2007
Main CT rate % 30% 28% 30%
Small companies rate 19% 21% 20%
Marginal Companies threshold ** 300,000 300,000 300,000
Main rate threshold £1,500,000 £1500000 £1,500,000
Marginal relief Fraction 11/400 between £300k & £1,500k  7/400 between £300k & £1,500k 1/40 between £300k & £1,500k

NOTES:

  • From 1st April 2006 all company profits below £300,000 are taxed at a flat rate of 19% and this increases to 20% from 1st April 2007 and thereafter to 21% from 1/4/2008 and 22% from 1/4/2009.

  • ** Company profits - between £300,000 and £1,500,000 are taxed initially at 30% but the liability is then subjected to a reduction of 1/40 of the difference between £1,500,000 and the total amount of profits and gains.
  • Company Capital Gains - these are charged to corporation tax at the appropriate rate without adjustment. Companies do qualify for indexation allowances for post-1982 gains
  • Close Investment Companies - are charged to corporation tax at the full corporation tax rate.

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Stamp Duty Land Tax

Stamp taxes and duties Transfers of land and buildings (consideration paid)
Rate Residential property Non- Residential Property  
Total value of consideration
Zero £0 - £125,000 £0 - £150000  
1% £125,001 - £250,00 £250,001- £250,000  
3% £250,001 - £500,000 £250,001 - £500,000
4% Over £500,000 Over £500,000

 

NOTES:

  • Interest & Penalties - Interest is payable on the unpaid Stamp Duty where any instrument is not stamped within 30 days of its execution.
  • Penalties  - apply where the instrument is not presented for stamping within 30 days from the execution. The penalty if presented within one year is the lower of £300 or the amount of  the unpaid duty. If after one year has elapsed then the penalty is the greater of £300 or the unpaid duty.

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Capital Gains Tax Reliefs

Hold-Over-Relief

Where there is a gift of an asset or a transfer of assets between "connected persons" (basically relatives - defined as husbands, wives, brothers sisters, uncles, aunts, nephews and nieces, ancestors and descendants) an election may be made to transfer the asset to the transferee at a no-gain/n loss result for capital gains tax purposes. Such claims may be made in respect of "business assets" (as defined) or where the assets are being transferred to a Discretionary trust. Specific advice will be needed where such transactions are being contemplated.

Roll-Over-Relief

Where a qualifying asset is sold, (broadly land, buildings, goodwill, fixed plant and machinery, ships aircraft satellites and hovercraft, and various types of agricultural quotas), and the sales proceeds are reinvested in new qualifying assets, subject to specific qualifying conditions the capital gain arising on the disposal may be deferred until the "replacement asset" is eventually disposed of.

Enterprise Investment Scheme deferral relief

Capital gains  can be deferred by reinvestment in the acquisition of qualifying shares in companies which are eligible for Enterprise Investment  Scheme status. The acquisition must be by subscription and only the amount of the capital gain needs to be invested to defer the gains. The qualifying conditions are quite rigorous and the reinvestment must be made within the time window of one year before or three years after the gains arising. Similar deferral reliefs are available for investment in qualifying Venture Capital Trust but the time limits are narrower and the qualifying company status conditions are rather more rigorous. Specialist advice must be sought as in any tax related planning decisions,

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Private Residence Relief

The sale of one own private home is normally exempted from Capital Gains Tax but the exemption should never be taken for granted. The relief available is for the disposal of the private residence and the garden or grounds which  go with it but there are specific conditions about the size of the grounds and also where the home has been used for non-residential purposes or part is being sold off separately there can be problems. 

Entrepreneurs' Relief

Finance Bill 2008 introduces a new capital gains tax relief for the disposal of the whole or part of a business or of qualifying shares in a trading company. Full details will be added here when the 2008 Finance Act has received Royal Assent. In the meantime details can be found on the HMRC website at: http://www.hmrc.gov.uk/cgt/disposal.htm

See also:

http://www.hmrc.gov.uk/cgt/entre-faqs.htm

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