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Below are the tax tables for 2009/10. Use the links below to jump to the subject you are interested in:
 

Click here to view the tax tables for 2007/08

Income Tax

Tax rates Note 2009/10 2008/09
Starting rate limit* £2,440 £2,320
  Tax rate* 10% 10%
Basic rate band £37,400 £34,800
  Basic rate 20% 20%
  Savings rate 20% 20%
  Dividend ordinary rate 10% 10%
Higher rate - taxable income over £37,400 £34,800
  Higher tax rate 40% 40%
  Dividend upper rate 32.5% 32.5%
* Where taxable non-savings income does not fully occupy the starting rate limit, the remainder of the limit is available for savings income at the 10% starting rate.    
Trusts    
For interest in possession trusts on all income, and other trusts on the first £1,000 of income ("standard rate band"):    
dividend ordinary rate 4 10% 10%
savings income 4 20% 20%
other income 4 20% 20%
Income of other trusts above £1,000 is taxed at the special trust rates:    
rate applicable to trusts   40% 40%
dividend trust rate   32.5% 32.5%
Allowances that reduce taxable income    
Personal allowance (PA) under 65 1 £6,475 £6,035
  65 to 74* 1,3 £9,490 £9,030
  75 and over* 1,3 £9,640 £9,180
  minimum   £6,475 £6,035
  Blind person's allowance   £1,890 £1,800
Allowances that reduce tax    
Married couple's allowance (MCA)      
Tax reduction 74* 1,2,3 n/a £653.50
  75 and over* 1,2,3 £696.50 £662.50
  minimum   £267 £254
* The age-related allowances are progressively withdrawn if income exceeds £22,900 £21,800
Tax Shelters    
Enterprise Investment Scheme (EIS) up to £500,000 £500,000
Venture Capital Trust (VCT) up to £200,000 £200,000
Golden Handshake max. £30,000 £30,000
Rent a Room - exempt on gross annual rent up to £4,250 £4,250
Construction Industry Scheme deduction rate:    
Standard (registered) 20% 20%
Higher (not registered) 30% 30%

Notes

  1. Ages are as the end of the tax year. Ages for the MCA relate to the elder of spouse or civil partner
  2. MCA is available only to those couples where at least one spouse or civil partner was born before 6 April 1935.
  3. The higher rates of personal allowances are reduced by £1 for each £2 of excess income over £22,900 (2008/09 £21,800) until the basic allowance is reached. Similar limits apply to the married couple's allowance: the loss of tax reduction is 10p for each £2 of excess income until the minimum of £267 (2008/09 £254) is reached. (For couples married before 5 December 2005, only the husband's income is taken into account. For those married on or after 5 December 2005 or in a civil partnership, only the higher earner’s income is taken into account).
  4. Where there are several trusts created by the same settlor, the "standard rate band" is divided equally between them, subject to a minimum band of £200 for each trust.

Main Capital Allowance

Plant and Machinery:

Energy saving and environmentally beneficial equipment, electric and low CO2 emission (up to 110 g/km) cars, natural gas/hydrogen refuelling equipment:  first year allowance 100%

Annual investment allowance (AIA) – on first £50,000 of investment not already qualifying for 100% first year allowance 100%*

First year allowance on qualifying investments exceeding £50,000 40%

Writing down allowance (WDA) on expenditure not qualifying for AIA:

    Long-life assets, integral features of buildings, cars over 160g/km 10%*

    Other plant and machinery 20%*

    Industrial and agricultural buildings and hotels WDA (on building cost) 2%*

Enterprise Zone allowance, conversion of parts of business premises into flats, business premises renovation: max initial allowance 100%

* Transitional rules may apply

 
Corporation Tax

Corporation tax rates and bands are as follows:

Financial Year to 31 March 2010 31 March 2009
Taxable profits    
First £300,000 21% 21%
Next £1,200,000 29.75% 29.75%
Over £1,500,000 28% 28%

Capital Gains Tax

Capital gains tax rates and bands are as follows:
2009/10 2008/09
On chargeable gains 18% 18%
Annual exemption
- individual £10,100 £9,600
- settlement(s) (spread over total number) £5,050 £4,800
Chattels exemption
(proceeds per item or set) £6,000 £6,000

Entrepreneurs' Relief

This relief will reduce the chargeable gain on qualifying assets by 4/9, resulting in an effective rate of 10%.  An individual will be able to make claims for disposals on or after 6 April 2008.  Claims may be made on more than one occasion, up to a “lifetime” total of £1 million of gains.

Notes

  1. Transfers between husband and wife or civil partners living together are generally exempt.
  2. Capital gains of all trusts for 2009/10 are taxed at the standard rate of 18%. Where there are several trusts created by the same settlor, the annual exemption is divided equally between them, subject to a minimum exemption of £1,010 (2008/09 £960) for each trust.
National Insurance

Class 1 (not contracted out) Employer Employee
Payable on weekly earnings of    
£95 (lower earnings limit) to £110 0% 0%
£110.01 - £770 (upper accrual point) 12.8% 11%
£770.01 - £844 (upper earnings limit) 12.8% 11%
Over £844 12.8% 1%
Over state retirement age, the employee contribution is Nil
   
Class 1A (on relevant benefits) 12.8% Nil
   
Class 1B (on PAYE settlement arrangement) 12.8% Nil
   
Class 2 (Self employed) £2.40 per week
Limit of net earnings for exception £5,075 per annum
   
Class 3 (Voluntary) £12.05 per week
   
Class 4 (* Self employed on profits)  
£5,715 - £43,875 8%
Excess over £43,875 1%
*Exemption applies if state retirement age was reached by 6 April 2009.

Note

For those earning between £95 per week and £770 per week, employers receive a rebate of 1.4% on contracted out money purchase schemes or 3.7% on contracted out final salary schemes, and employees, a rebate of 1.6% for either scheme.

VAT

From 1 Dec 2008 1 Jan 2010
Standard rate 15% 17.5%
VAT fraction 3/23 7/47
Reduced Rate 5% 5%
Taxable Turnover Limits from 1 May 2009
Registration - last 12 months or next 30 days over £68,000
Deregistration - next 12 months under £66,000
Cash accounting scheme - up to £1,350,000
Optional flat rate scheme - up to £150,000
Annual accounting scheme - up to £1,350,000


VAT on fuel for private use in cars

Where businesses wish to reclaim the input VAT on fuel which has some degree of private use, they must account for output VAT on a scale charge.

The table shows the VAT chargeable for quarters commencing on or after 1 May 2009. The last two columns take account of the change of the standard rate of VAT from 15% to 17.5% with effect from 1 January 2010.

CO2 emissions
(g/km)
Quarterly VAT
Fuel scale
charge £
VAT on charge
£ (15%) £ (17.5%)
120 and below 126 16.43 18.76
121 - 139 189 24.65 28.14
140 - 144 201 26.21 29.93
145 - 149 214 27.91 31.87
150 - 154 226 29.47 33.65
155 - 159 239 31.17 35.59
160 - 164 251 32.73 37.38
165 - 169 264 34.43 39.31
170 - 174 276 36.00 41.10
175 - 179 289 37.69 43.04
180 - 184 302 39.39 44.97
185 - 189 314 40.95 46.76
190 - 194 327 42.65 48.70
195 - 199 339 44.21 50.48
200 - 204 352 45.91 52.42
205 - 209 365 47.60 54.36
210 - 214 378 49.30 56.29
215 - 219 390 50.86 58.08
220 - 224 403 52.56 60.02
225 - 229 416 54.26 61.95
230 - 234 428 55.82 63.74
235 and above 441 57.52 65.68
Inheritance Tax

  2009/10 2008/09
Standard threshold £325,000 £312,000
Combined threshold maximum for married couples and civil partners £650,000 £624,000
Rate of tax on balance:    
    Chargeable lifetime transfers
    Transfers on, or within 7 years of, death
20%
40%
20%
40%

All lifetime transfers not covered by exemptions and made within seven years of death will be added back into the estate for the purpose of calculating the tax payable. Tax attributable to such transfers is then reduced:


Years before death 0-3 3-4 4-5 5-6 6-7
Tax reduced by 0% 20% 40% 60% 80%


Main Reliefs
Business property:
- business or interest therein 100%
- qualifying shareholdings in unquoted* companies 100%
- land, buildings, machinery, or plant used by transferor's controlled company or partnership 50%
Agricultural property 50% or 100%
*Unquoted companies include those listed on AIM

Main Exemptions

  1. Most transfers between spouses and civil partners.
  2. The first £3,000 of lifetime transfers in any tax year plus any unused balance from previous year.
  3. Gifts of up to but not exceeding £250p.a to any number of persons.
  4. Gifts in consideration of marriage or civil partnership of: up to £5,000 by a parent, up to £2,500 by a grandparent, or up to £1,000 by any other person.
  5. Gifts made out of income that form part of normal expenditure and do not reduce the standard of living.
  6. Gifts to charities, whether made during lifetime or on death.

Vehicle Benefits

Chargeable on employees earning £8,500 or over (including benefits), and directors.

Car Benefit

The taxable benefit is calculated as a percentage of the list price of the car, on the day before it was first registered, plus certain accessories. This percentage depends upon the rate at which the car emits carbon dioxide (CO2), and the fuel type.

You can find the appropriate percentage for 2009/10 using the following table:

CO2 emissions
(g/km)
Appropriate percentage
Petrol % Diesel %
120 and below 10 13
121 - 139 15 18
140 - 144 16 19
145 - 149 17 20
150 - 154 18 21
155 - 159 19 22
160 - 164 20 23
165 - 169 21 24
170 - 174 22 25
175 - 179 23 26
180 - 184 24 27
185 - 189 25 28
190 - 194 26 29
195 - 199 27 30
200 - 204 28 31
205 - 209 29 32
210 - 214 30 33
215 - 219 31 34
220 - 224 32 35
225 - 229 33 35
230 - 234 34 35
235 and above 35 35


How to find out how much CO2 your company car emits – see:

  • the car’s V5 registration document
  • your dealer
  • the data pages of car magazines (current models)

Reliable emissions data is not widely available for cars registered before 1 January 1998. For them, the following taxable percentages apply, regardless of fuel type:

Engine capacity Taxable %
Up to 1400cc 15%
1401 - 2000cc 22%
Over 2000cc 32%

Car fuel benefits

If the employee pays for the full cost of all fuel for private journeys (usually including home to work) there will be no car fuel benefit. In all other cases the full tax charge will be due.

Fuel-Only Mileage Rates
HMRC advisory mileage rates at the time of the Budget for employee private mileage reimbursement or employer reimbursement of business mileage in company cars are:
  Petrol Diesel LPG
Up to 1400cc 10p 11p 7p
1401cc - 2000cc 12p 11p 9p
Over 2000cc 17p 14p 12p

The taxable car fuel benefit, for 2009/10, is calculated by multiplying £16,900 by the same percentage as applies (or would apply) for the car benefit.

Example: A company car driver has a car which, on the day before it was first registered, had a list price of £18,000. It runs on petrol, and emits 177 g/km of CO2.

If we assume the driver pays tax at 40%, the annual tax bill on the car is: £18,000 x 23% x 40% = £1,656

If the employer provides any fuel used for private journeys and is not reimbursed for the cost, the 2009/10 tax bill for the fuel is: £16,900 x 23% x 40% = £1,554.80.

Company vans

The taxable benefit for the unrestricted use of company vans is £3,000 (with no reduction for older vans) plus a further £500 of taxable benefit if fuel is provided by the employer for private travel.

Van and fuel charge Van Fuel Total
Tax (20% taxpayer) £600 £100 £700
Tax (40% taxpayer) £1,200 £200 £1,400
Employer's class 1A NICs £384 £64 £448

Van drivers can avoid a benefit charge if they agree not to use the van for personal journeys. Driving to and from work is acceptable so long as there is a reasonable amount of business use.


Mileage Allowances


For Employees Using Their Own Transport
The approved maximum tax and national insurance free mileage allowances for employees using their own transport for business are as follows:
Flat Rate First 10,000 Miles Thereafter
Car / Van 40p 25p
Motorcycle 24p 24p
Bicycle 20p 20p
Income Tax and NICs are due when allowances exceed these rates. Employees can claim tax relief on any shortfall.
Rates of up to 5p per mile, per passenger, are also tax and NIC free when paid for the carriage of fellow employees on the same business trip.


Fuel-Only Mileage Rates
HMRC advisory mileage rates at the time of the Budget for employee private mileage reimbursement or employer reimbursement of business mileage in company cars are:
  Petrol Diesel LPG
Up to 1400cc 10p 11p 7p
1401cc - 2000cc 12p 11p 9p
Over 2000cc 17p 14p 12p

Key Dates and Deadlines  

 
 

Payment Dates
Income Tax (including Class 4 NIC)
31 July 2009 2008/09 second payment on account
31 January 2010 2008/09 balancing payment, and
2009/10 first payment on account
31 July 2010 2009/10 second payment on account
31 January 2011 2009/10 balancing payment, and
2010/11 first payment on account
Class 1A NICs
19 July 2009 2008/09 payment due
Capital Gains Tax
31 January 2010 2008/09 Capital Gains Tax
31 January 2011 2009/10 Capital Gains Tax
Corporation Tax
9 months and one day after the end of the accounting period
Inheritance Tax
6 months after the end of the month of death or chargeable transfer.
For chargeable lifetime transfers between 6 April and 30 September, due date is 30 April in the following year.
For chargeable lifetime transfers between 1 October and 5 April, due date is six months after the end of the month in which the transfer was made.
Latest Filing/Issuing Deadlines -2008/09 PAYE Returns
19 May 2009 P14, P35, P38, and P38A
31 May 2009 Issue P60s to employees
6 July 2009 P9D, P11D and P11Db - also issue copies to employees
Form 42 (reporting of employment-related securities)
2009 Self Assessment Tax Return (SATR)
31 October 2009 Last filing date - SATR Paper Version
30 December 2009 SATR Online if outstanding tax (less than £2,000) to be included in 2010-11 PAYE code
31 January 2010 Last filing date - SATR Online

 

Stamp Duty

The rate of stamp duty / stamp duty reserve tax on the transfer of shares and securities is generally payable at 0.5 per cent.

Stamp Duty Land Tax

Transfers of property are subject to stamp duty land tax at the following rates:


Value up to £125,000* Nil
Over £125,000* to £250,000 1%
Over £250,000 to £500,000 3%
Over £500,000 4%
* £150,000 for non-residential property and residential property in disadvantaged areas. The threshold is £175,000 for residential property (including disadvantaged areas) for transactions with an effective date on/after 3 September 2008 and before 1 January 2010. Special rules apply for new zero-carbon homes.

New Leases

Duty is charged according to the net present value of all the rental payments over the term of the lease (NPV), with a single rate of 1% on residential NPV's over £125,000 and on non-residential NPV's over £150,000.

VAT is excluded from treatment as consideration provided the landlord has not opted to charge VAT by the time the lease is granted.

Lease premiums

Duty on premiums is the same as for transfers of land (except that the zero rate does not apply where rent of over £600 annually is also payable).


Pension Premiums   .

There is no financial limit on the amount that may be contributed to a registered pension scheme. The maximum amount on which an individual can claim tax relief in any tax year is the greater of the individual's UK relevant earnings or £3,600.

If total pension input exceeds the annual allowance of £245,000 there is a tax charge at 40% on the excess. This limit does not apply in the year that full pension benefits are taken.

Maximum age for tax relief 74
Minimum age for taking benefits 50
Lifetime allowance charge – lump sum paid 55%
                                      – monies retained    25%
on cumulative benefits exceeding £1,750,000
Maximum tax-free lump sum 25%*

*Subject to transitional protection for excess amount.

Note - Total pension input is the increase in value of the aggregate of all the individual's pension savings. The pension input period is usually the year to the anniversary date which falls within the relevant tax year.

Charitable Giving   .

Gift Aid

  1. Individuals are able to claim higher rate relief on cash gifts and payments to charities under gift aid. Basic rate tax is treated as having been deducted, so you must pay enough tax for the year to cover the tax witheld from your Gift Aid payment.
  2. Special tax reliefs apply to gifts to charities of certain types of shares and securities, or land and buildings.
  3. Self-assessment now allows individuals to divert some or all of any tax repayment due to them for the year to a charity of their choosing, and to opt for this to be treated as a Gift Aid payment, both via entries on the tax return.
  4. Individuals also now have the option to make a claim for a charitable donation made in one tax year to be treated as if it had been made in the previous tax year, so long as the claim is made by inclusion on the Tax Return for the later year. Provided the later year's Return is filed in time, this would mean that a payment could rank for higher rate tax relief for the earlier year, even if the donor is liable at basic rate only in the tax year in which the payment is made.

Give As You Earn

  1. Employees may authorise participating employers to deduct donations from their gross salary for forwarding to their nominated charities.
  2. Employees receive tax relief in full on their donations.
Some Useful Rates   .

  Weekly Benefit
  2009/10 2008/09
Basic Retirement Pension    
Single person £95.25 £90.70
Couple £152.30 £145.05
Child Benefit    
First eligible child £20.00 £18.80
Each subsequent child £13.20 £12.55
Statutory Sick Pay (SSP)    
Average weekly earnings £95 or over (2008/09 £90) £79.15 £75.40
Statutory Maternity Pay (SMP)    
90% of average weekly pay First 6 weeks First 6 weeks
Maximum £123.06 (2008/09 £117.18). Minimum 90% average weekly pay Next 33 weeks Next 33 weeks
Mimimum rate £85.50 £81
Adoption Pay (SAP) 39 weeks 39 weeks
Paternity Pay (SPP) 2 weeks 2 weeks
Both SAP and SPP    
90% of average weekly pay Max £123.06
Min £85.50
Max £117.18
Min £81
Example rates:
Jobseekers Allowance    
Single person £64.30 £60.50
Couple £100.95 £94.95
National Minimum Wage From 1 October 2009 From 1 October 2008
  Over 21 TBA £5.73 p.h.
18 - 21 TBA £4.77 p.h.
16 and 17 TBA £3.53 p.h.

Savings & Investments   .

ISAs


Individual Savings Accounts (ISAs)
  Aged under 50 Aged 50 and over*
Overall investment limit £7,200 £10,200
Including cash maximum of £3,600 £5,100

*Available from 6 October 2009

Notes

  1. Investments in ISAs are free of income tax and capital gains.
  2. Those aged 16-17 can invest up to £3,600 only, in a cash ISA.
  3. ISAs allow you to take your money out at any time without losing tax relief and furthermore you are not required to declare income and capital gains from ISA savings.

 


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