|
|
Income Tax
Taxable bands
2007-08
|
£
per year
|
2008-09
|
£
per year
|
|
Starting rate: 10% |
£0-£2,230 |
- |
- |
|
Basic rate: 22% |
£2,231-£34,600 |
Basic rate: 20%* |
£0-£36,000 |
|
Higher rate: 40% |
Over
£34,600 |
Higher rate: 40%* |
Over
£36,000 |
*There will be a new 10% starting
rate for savings income only, with a limit of £2320. If an individual’s
taxable non-savings income is above this limit then the 10% savings rate
will not be applicable. There are no changes to the 10% dividend ordinary
rate or the 32.5% dividend upper rate.
Personal and
age-related allowances
£
per year (unless stated)
|
2007-08
|
2008-09
|
| |
|
Personal allowance (age under 65) |
£5,225 |
£5,435 |
|
Personal allowance (age 65-74) |
£7,550 |
£9,030 |
|
Personal allowance (age 75 and over) |
£7,690 |
£9,180 |
|
Married couple's allowance* (aged less than 75 and born before 6th
April 1935) |
£6,285 |
£6,535 |
|
Married couple's allowance* (age 75 and over) |
£6,365 |
£6,625 |
|
Married couple's allowance* - minimum amount |
£2,440 |
£2,540 |
|
Income limit for age-related allowances |
£20,900 |
£21,800 |
|
Blind person’s allowance |
£1,730 |
£1,800 |
|
Capital gains tax annual exempt amount |
|
Individuals etc. |
£9,200 |
£9,600 |
|
Most
trustees |
£4,600 |
£4,800 |
|
Individual inheritance tax allowance |
£300,000 |
£312,000 |
|
Pension schemes allowances |
|
Annual Allowance |
£225,000 |
£235,000 |
|
Lifetime Allowance |
£1,600,000 |
£1,650,000 |
*Married couple's allowance is given
at the rate of 10 per cent.
Working and Child Tax Credits rates
£
per year (unless stated)
|
2007-08
|
2008-09
|
|
Working Tax Credit |
|
Basic element |
£1,730 |
£1,800 |
|
Couple and lone parent element |
£1,700 |
£1,770 |
|
30
hour element |
£705 |
£735 |
|
Disabled worker element |
£2,310 |
£2,405 |
|
Severe disability element |
£980 |
£1,020 |
|
50+
Return to work payment (16-29 hours) |
£1,185 |
£1,235 |
|
50+
Return to work payment (30+ hours) |
£1,770 |
£1,840 |
|
Childcare element of the Working Tax Credit |
|
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 |
|
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 |
|
Income thresholds and withdrawal rates |
|
First income threshold |
£5,220 |
£6,420 |
|
First withdrawal rate |
37% |
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 |
£14,495 |
£15,575 |
|
Income disregard |
£25,000 |
£25,000 |
Child
Benefit and Guardian’s Allowance rates from 6 April 2008.
£
per week
|
2007-08
|
2008-09
|
|
Eldest/Only Child |
£18.10 |
£18.80 |
|
Other Children |
£12.10 |
£12.55 |
|
Guardian’s Allowance |
£12.95 |
£13.45 |
Child Benefit is raised in line with
statutory indexation.
The child element of Child Tax Credit
(CTC) increases by £175 above average earnings. The disabled child element
and severely disabled elements rise with statutory indexation. The family
element (normal and baby addition) remains frozen at £545 per year. The
income threshold for CTC only rises to £15,575 per year. The income
threshold for CTC family element only remains at £50,000 per year.
The maximum eligible childcare costs
remains at £175 for one child and £300 for two or more children. The
percentage of eligible childcare costs remains at 80 per cent.
The disregard in Tax Credits for
increases in income between one tax year and the next remains at £25,000.
Pension schemes allowances
|
Standard Lifetime Allowance |
|
Tax Year |
Amount (£) |
|
2006 – 2007 |
£1,500,000 |
|
2007 – 2008 |
£1,600,000 |
|
2008 – 2009 |
£1,650,000 |
|
2009 – 2010 |
£1,750,000 |
|
2010 – 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.
|
Charges |
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% |
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.
|
|
First 10,000 business miles in the tax year
|
Each mile over 10,000 miles in the tax year
|
|
|
40p |
25p |
|
|
24p |
24p |
|
|
20p |
20p |
|
