Taxable bands*
Year 2012/13 | £ per year | % Rate |
---|---|---|
Basic rate | £1 - 34,370 | Basic rate: 20% |
Higher rate | £34,371 - £150,000 | Higher rate: 40% |
Additional rate | Over £150,000 | Additional rate: 50% |
Year 2011/12 | £ per year | % Rate |
Basic rate | £1 - £35,000 | Basic rate: 20% |
Higher rate | £35,001 - £150,000 | Higher rate: 40% |
Additional rate | Over £150,000 | Additional rate: 50% |
Year 2010/11 | £ per year | % Rate |
Basic rate | £1 - £37,400 | Basic rate: 20% |
Higher rate | £37,401 - £150,000 | Higher rate: 40% |
Additional rate | Over £150,000 | Additional rate: 50% |
Year 2009/10 | £ per year | % Rate |
Basic rate | £0-£37,400 | Basic rate: 20% |
Higher rate | Over £37,400 | Higher rate: 40% |
*There is a 10p starting rate for savings income only. If an individual’s non savings taxable income exceeds the starting rate limit, the 10p starting rate for savings will not be available for savings income
22 July Emergency Budget
The Budget announced that, in 2011-12, the income tax personal allowance for under 65s will be increased by £1,000 in cash terms, taking it from £6,475 in 2010-11 to £7,475 in 2011-12. To ensure that the majority of higher rate taxpayers will pay the same total level of income tax and National Insurance Contributions (NICs) as previously planned, the Government will also reduce the basic rate limit for tax by £2,500, and the upper earnings and profits limits for NICs by £1,650, based on current estimates of the Retail Prices Index (RPI). Exact figures for the basic rate limit and higher rate threshold will be confirmed in the autumn.
Indexation of benefits and tax credits
The Government will use the Consumer Prices Index (CPI) for the price indexation of benefits and tax credits from April 2011. This change will also apply to public service pensions through the statutory link to the indexation of the Second State Pension. The Government is also reviewing how the CPI can be used for the indexation of taxes and duties while protecting revenues.
Income Tax Rates
2009-10 | 2010-11 | 2011-12 | |
---|---|---|---|
Starting rate for savings | 10% | 10% | 10% |
Basic rate: | 20% | 20% | 20% |
Higher rate: 40%* | 40% | 40% | 40% |
Additional rate** | N/A | 50% | 50% |
Basic rate on dividends (effective rate with tax credit) | 10% (0%) | 10% (0%) | 10% (0%) |
Higher rate on dividends (effective rate with tax credit) | 32.5% (25%) | 32.5% (25%) | 32.5% (25%) |
Additionalrate on dividends (effective rate with tax credit) | N/A | 42.5% (36.1%) | 42.5% (36.1%) |
*Over £37,400 for 2009-10 and 2010-11, over £34,900 for 2011-12.
**Over £150,000.
Personal and age-related allowances
£ per year (unless stated) | 2009-2010 | 2010-2011 | 2011-2012 |
---|---|---|---|
Personal allowance (age under 65) | £6,475 | £6,475 | £7,475 |
Personal allowance (age 65-74) | £9,490 | £9,490 | £9,490 |
Personal allowance (age 75 and over) | £9,640 | £9,640 | £9,640 |
Married couple's allowance** (age 75 and over) | £6,965 | £6,965 | £6,965 |
Married couple's allowance** - minimum amount | £2,670 | £2,670 | £2,670 |
Income limit for age-related allowances | £22,900 | £22,900 | £22,900 |
Blind person’s allowance | £1,890 | £1,890 | £1,890 |
Capital gains tax annual exempt amount | |||
Individuals etc. | £9,600 | £10,100 | £10,100 |
Most trustees | £4,800 | £5,050 | £5,050 |
Individual inheritance tax allowance | £312,000 | £325,000 | £325,000 |
Pension schemes allowances | |||
Annual Allowance | £235,000 | £245,000 | £245,000 |
Lifetime Allowance | £1,650,000 | £1,750,000 | £1,750,000 |
*From April 2010, the personal allowance will be gradually withdrawn for incomes over £100,000 at a rate of £1 of allowance lost for every £2 over £100,000 until it is completely removed.
** Available to people born before April 6 1935. Tax relief for this allowance is restricted to 10%.
The capital gains tax (CGT) annual exempt amount increased in line with statutory indexation to £10,100 for the tax year 2009-10 for individuals, personal representatives of deceased persons and trustees of certain settlements for the disabled. The annual exempt amount for most other trustees is increased to £5,050.
Every husband, wife, civil partner and child has his or her own £10,100 annual exempt amount.
For capital gains above the annual exempt amount the CGT rate for 2009-10 will continue to be 18 per cent.
Working and Child Tax Credits rates
£ per year (unless stated) | 2009-10 | 2010-11 |
---|---|---|
Working Tax Credit | #colpsan# | #colpsan# |
Basic element | £1,890 | £1,920 |
Couple and lone parent element | £1,860 | £1,920 |
30 hour element | £775 | £790 |
Disabled worker element | £2,530 | £2,570 |
Severe disability element | £1,075 | £1,095 |
50+ Return to work payment (16-29 hours) | £1,300 | £1,320 |
50+ Return to work payment (30+ hours) | £1,935 | £1,965 |
Childcare element of the Working Tax Credit | #colpsan# | #colpsan# |
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 | #colpsan# | #colpsan# |
Family element | £545 | £545 |
Family element, baby addition | £545 | £545 |
Child element | £2,235 | £2,300 |
Disabled child element | £2,670 | £2,715 |
Severely disabled child element | £1,075 | £1,095 |
Income thresholds and withdrawal rates | #colpsan# | #colpsan# |
First income threshold | £6,420 | £6,420 |
First withdrawal rate | 39% | 39% |
Second income threshold | £50,000 | £50,000 |
Second withdrawal rate | 6.67% | 6.67% |
First threshold for those entitled to Child Tax Credit only | £16,040 | £16,190 |
Income disregard | £25,000 | £25,000 |
As announced at the 2009 Pre-Budget Report, on 6 April 2010 all elements of the Working Tax Credit (WTC), apart from the childcare element, will increase by 1.5 per cent. The limits on eligible childcare costs in the childcare element remain at £175 for one child and £300 for two or more children. The proportion of childcare costs payable through the childcare element of WTC remains at 80 per cent. The disability elements of the Child Tax Credit will increase by 1.5 per cent. The family element and baby addition remain unchanged. As announced in Budget 2009, the child element of the Child Tax Credit will rise by £20 above indexation in April 2010, an increase of £65 in cash terms. As announced at the 2009 Pre-Budget Report, the threshold for receipt of the maximum Child Tax Credit will rise to £16,190 reflecting the income level at which a family in receipt of the basic and couple or lone parent elements of WTC would have their entitlement to WTC tapered to zero, and the threshold for receiving maximum family element of CTC remains at £50,000. The withdrawal rate for the family element remains at 6.67 per cent, and for the rest of tax credits at 39 per cent.
22 July Emergency Budget
The Budget announced several changes to the Child and Working Tax Credit. Summarised below are the main changes coming into effect in April 2011. Full details of all changes are available in the Budget document.
The child element of the Child Tax Credit will increase by £150 above CPI in April 2011. The baby element of the Child Tax Credit will be removed from April 2011.
In addition, there will be changes to the thresholds and withdrawal rates as set out below.
Child and Working Tax Credits rates
£ per year (unless stated) | 2010-11 | 2011-12 |
---|---|---|
Income thresholds and withdrawal rates | ||
First withdrawal rate | 39% | 41% |
Second income threshold | 50,000 | 40,000 |
Second withdrawal rate | 6.67% | 41% |
Income disregard | 25,000 | 10,000 |
Child Benefit and Guardian’s Allowance rates from 6 April 2008.
£ per week 2009-10 2010-11 Eldest/Only Child £20.00 (from Jan 2009) £20.30 Other Children £13.20 (from Jan 2009) £13.40 Guardian's Allowance £13.45 £14.30
As announced at the Pre-Budget Report 2009, on 12 April Child Benefit and Guardian’s Allowance will increase by 1.5 per cent.
22 July Emergency Budget
From 2011-12, both rates of Child Benefit will be frozen for three years.
Pension schemes allowances
Standard Lifetime Allowance Tax Year Amount (£) 2006 Ð 2007 £1,500,000 2007 Ð 2008 £1,600,000 2008 Ð 2009 £1,650,000 2009 Ð 2010 £1,750,000 2010 Ð 2011 £1,800,000
Member Contributions
There is no limit on the amount that an individual can contribute to a registered pension scheme. If you are a UK resident aged under 75 you may receive tax relief on your contributions to a registered pension scheme. Tax relief is limited to relief on contributions up to the higher of 100% of your UK taxable earnings, and £3600.
Any amount of contributions paid over the annual allowance will be liable to the annual allowance charge.
Annual Allowance | |
---|---|
Tax Year | Amount (£) |
2006 - 2007 | £215,000 |
2007 - 2008 | £225,000 |
2008 - 2009 | £235,000 |
2009 - 2010 | £245,000 |
2010 - 2011 | £255,000 |
Notional Earnings Cap
Before 6 April 2006 the rules of many pension schemes limited the amount of benefits that could be provided or contribution paid by reference to the permitted maximum under s590C ICTA 1988. Although section 590C ICTA 1988 was repealed on 6 April 2006 the permitted maximum can continue to apply to registered pension schemes for a period up to 5 April 2011 because of regulation 4 of The Registered Pension Schemes (Modification of the Rules of Existing Schemes) Regulations 2006 – SI 2006/364.
If section 590C had not been repealed on 6 April 2006, a Treasury order would have stated the permitted maximum figure for the tax years as follows;
Tax Year | Amount (£) |
---|---|
2006 - 2007 | £108,600 |
2007 - 2008 | £112,800 |
2008 - 2009 | £117,600 |
Tax charges on payments from registered pension schemes
There are a number of special tax charges that apply to special payments made from registered pension schemes. These are listed below. The normal income tax rates apply to ordinary pensions payments made from pension schemes.
Rates | |
---|---|
Lifetime allowance charge | 55% - if the amount over the lifetime allowance is paid as a lump sum 25% - if the amount over the lifetime allowance is not taken as a lump sum |
Annual allowance charge | 40% |
Unauthorised payments charge | 40% |
Unauthorised payments surcharge | 15% |
Short service refund lump sum charge | 20% on first £10,800, 40% on amounts over £10,800 |
Special lump sum death benefits charge | 35% |
Authorised surplus payments charge | 35% |
Scheme sanction charge | 15% - 40% |
State Pension and Pension Credit
As announced at the Pre-Budget Report 2009, on 12 April 2010 the basic State Pension will increase by 2.5 per cent, in line with the Government’s commitment to increase it by the higher of September’s Retail Prices Index or 2.5 per cent. Pension credit means that no single pensioner need live on less than £132.60 a week in 2010-11 and no couple on less than £202.40
£ per week | 2009-10 | 2010-11 |
---|---|---|
State pension | ||
Category A or B basic State Pension | 95.25 | 97.65 |
Category B basic State Pension (lower) Ð spouse or civil partnerÕs insurance | 57.05 | 58.50 |
Category C or D - non-contributory | 57.05 | 58.50 |
Category C (lower) - non-contributory | 34.15 | 35.00 |
Pension Credit | ||
Standard minimum guarantee Ð single | 130.00 | 132.60 |
Standard minimum guarantee Ð couple | 198.45 | 202.40 |
Savings Credit threshold Ð single | 96.00 | 98.40 |
Savings Credit threshold Ð couple | 153.40 | 157.25 |
Savings Credit maximum Ð single | 20.40 | 20.52 |
Savings Credit maximum Ð couple | 27.03 | 27.09 |
22 July Emergency Budget
The Government will uprate the basic State Pension by a triple guarantee of the highest of earnings, prices or 2.5 per cent from April 2011. The CPI will be used as the measure of prices, consistent with the Government’s decision to index all benefits and tax credits by the CPI, although the basic State Pension will increase by at least the equivalent of the Retail Prices Index (RPI) in April 2011 to ensure its value is at least as generous as under previous uprating rules. The standard minimum income guarantee in Pension Credit will increase in April 2011 by the cash rise in a full basic State Pension.
Individual Savings Accounts
As announced at Budget 2009, from 6 April 2010 the annual ISA investment limit for every adult is £10,200, up to £5,100 of which can be saved in cash. This higher limit has applied for those aged 50 and over since October 2009.
Individual Savings Account | 2009-10 | 2010-11 |
---|---|---|
For those aged under 50 | £7,200, of which up to £3,600 can be saved in cash. | £10,200, of which up to £5,100 can be saved in cash. |
For those aged 50 and over | 10,200, of which up to £5,100 can be saved in cash. | 10,200, of which up to £5,100 can be saved in cash. |
Construction Industry
Sub-contractor/s rate of deduction at source - 2000/01 onwards | 18% |
Car benefits
From 6 April 2002 the charge on the benefit of a company car is based on a percentage of the list price and graduated according to CO2 emissions.
CO2 emissions (g/km)
(see note)2005/06 to 2007/08 2008/09 onwards 135 15% 15% 140 15% 16% 145 16% 17% 150 17% 18% 155 18% 19% 160 19% 20% 165 20% 21% 170 21% 22% 175 22% 23% 180 23% 24% 185 24% 25% 190 25% 26% 195 26% 27% 200 27% 28% 205 28% 29% 210 29% 30% 215 30% 31% 220 31% 32% 225 32% 33% 230 33% 34% 235 34% 35% 240 35% 35% 245 35% 35% 250 35% 35% 255 35% 35%
The appropriate percentage arrived at from this table is subject to other adjustments for alternative fuels, though it is used unless the car falls within one of the categories for which adjustments are required.
Legislation will be introduced in Finance Bill 2008 to set the rates of company car tax charge for 2010-11 and subsequent years.
Note: The exact CO2 figure is always rounded down to the nearest 5 grams per kilometre (g/km). For example, CO2 emissions of 188g/km are treated as 185g/km.
Fuel benefit
The charge on the fuel benefit is based on a percentage of a set figure and graduated according to CO2 emissions. For 2003/4 onwards, the set figure is £14,400.
Approved mileage rates
Approved mileage rates are statutory maximum amounts that can be paid without deducting tax and NICs. An employer can decide to pay more or less than the approved mileage rates.
2002-2003 to 2004-2005 | First 10,000 business miles in the tax year | Each mile over 10,000 miles in the tax year |
---|---|---|
Cars and vans | 40p | 25p |
Motor cycles | 24p | 24p |
Bicycles | 20p | 20p |
Tax relief for business expenditure on cars
New rules for tax relief for business expenditure on cars were announced on 1 April. These take effect from 1 April 2009 for businesses in the charge to Corporation Tax and 6 April 2009 for businesses in the charge to Income Tax. The rate at which qualifying expenditure on cars can be written down against profits will depend on the car’s CO2 emissions. Expenditure on cars with CO2 emissions exceeding 160 g/km will be allocated to the special rate capital allowances pool and attract 10% writing-down allowance (WDA). Expenditure on cars with CO2 emissions of 160g/km or less will attract 20% WDA in the main plant and machinery pool. The associated rules which disallow a proportion of car lease rental payments have also been amended in line with the new capital allowances rules.