Main Income Tax reliefs
| allowed at top rate of tax |
2009/10 |
2008/09 |
| personal allowance |
£6,475 |
£6,035 |
| personal allowance (65-74)* |
9,490 |
9,030 |
| personal allowance (75 and over)* |
9,640 |
9,180 |
| blind person's allowance |
1,890 |
1,800 |
|
| allowed only at 10% |
|
|
| married couple's allowance (up to 74)+* |
n/a |
6,535 |
| married couple's allowance (75 and over)+* |
6,965 |
6,625 |
| income limit for age-related allowances |
22,900 |
21,800 |
|
| + only available if born before 6th april 1935. |
| * age allowances are reduced £1 for every £2 by which income exceeds the income limit, until the age allowance is reduced to the normal allowance. personal allowance is reduced before married couple's allowance. mca is reduced to a minimum of £2,670 (2008/09: £2,540). |
|
| important annual limits |
2009/10 |
2008/09 |
| individual savings account investment |
7,200 |
£7,200 |
| rent a room exemption |
4,250 |
4,250 |
| enterprise investment scheme investment |
*500,000 |
*500,000 |
| venture capital trust investment |
**200,000 |
**200,000 |
|
| *relief at 20%**relief at 30%**£10,200 for those aged 50+ (6.10.09) |
Income Tax Rates and bands
|
2009/10 |
2008/09 |
|
| starting rate on band * (see note) |
2,440 |
2,320 |
| basic rate band |
37,400 |
34,800 |
| higher rate on taxable income over |
37,400 |
34,800 |
|
| * starting rate band is within basic rate band and applies to savings income only; if taxable general income exceeds the band, the 10% rate is not available. |
|
| tax rates |
|
|
| rates differ for general/interest/dividends |
|
2009/10 and 2008/09 |
| rates differ for general/interest/dividends |
g |
i |
d |
| starting rate |
n/a |
10% |
10% |
| basic rate |
20% |
20% |
10% |
| higher rate |
40% |
40% |
32.5% |
| general income (salary, pension, profit, rent) uses lower rate bands first, then savings (interest), then dividends. discretionary trusts: basic rate as above applies to the first £1,000 of income, then higher rate. |
|
Car Benefit Assessment
charge based on a percentage of the initial list price of the car, including accessories, delivery charges and vat. the percentage depends on the carbon dioxide emissions rating of the car, and whether the engine runs on petrol or diesel. lower rates may apply to electric or biofuel-adapted cars.
|
| ratings |
petrol |
diesel |
|
| 0-120g/km |
10% |
13% |
| 121-135g/km |
15% |
18% |
| over 135g/km |
+1% for each extra 5g/km (140,145 etc.) |
| maximum |
35% |
35% |
special rules apply to older cars which do not have a co2 rating.
employee contributions for private use are deducted from the taxable figure.
company vans are charged at £3,000 if private use is more than home-to-work travel. an additional amount of £500 is charged if fuel is provided free for private use. |
car fuel benefit
the benefit of free fuel for private use in a company car is calculated using the same percentage as that used for the car benefit, applied to a standard figure of £16,900. the taxable amount is therefore between £1,690 (min.) and £5,915 (max.).
Tax Free Mileage Allowances
|
higher rate |
lower rate |
|
2009/10 & 2008/09 unchanged |
| all cars |
40p |
25p |
| motorcycles |
24p |
24p |
| bicycles |
20p |
20p |
| business passengers |
5p |
5p |
|
| higher rate allowed up to 10,000 business miles. |
|
| fuel-only allowances for company cars |
|
|
petrol |
diesel |
lpg |
| from 1.1.2009 |
| up to 1400cc |
10p |
11p |
7p |
| 1401 – 2000cc |
12p |
11p |
9p |
| over 2000cc |
17p |
14p |
12p |
|
| these figures may change more often than once a year. |
National Insurance Contributions
| class 1 (employees) |
|
contracted in |
contracted out |
|
|
salary related |
money purchase |
| employee contributions |
|
|
|
| – on earnings between £110.01 – £770pw |
11.0% |
9.4% |
9.4% |
| – on earnings between £770 – £844pw |
11.0% |
11.0% |
11.0% |
| – on earnings above £844pw |
1.0% |
1.0% |
1.0% |
| employer contributions |
|
|
|
| – on earnings between £110.01 and £770pw |
12.8% |
9.1% |
11.4% |
| – on earnings above £770pw |
12.8% |
12.8% |
12.8% |
| employer contributions (at 12.8%) are also due on most benefits in kind and on tax paid on an employee's behalf under a paye settlement agreement. |
|
| class 2 (self-employed) |
| flat rate per week |
£2.40 |
| small earnings exception: profits per annum |
£5,075 |
|
| class 3 (voluntary) |
| flat rate per week |
£12.05 |
|
| class 4 (self-employed) |
| on profits £5,715 – £43,875 |
8.0% |
| on profits over £43,875 |
1.0% |
Pension Contributions
| maximum annual tax efficient gross contributions to age 75 |
| – individuals |
|
£3,600 or 100% of earnings to £245,000 |
| – employers |
|
£245,000 less employee contributions |
| maximum tax efficient fund on taking benefits in 2009/10: £1.75m (rising to £1.8m in 2010/11 then staying the same until 2015/16). |
|
| only current earnings count for the 100% limit. it is no longer possible to use prior year earnings or to carry back contribution to earlier years. |
|
| most personal pension contributions are paid net of basic rate tax. |
Inheritance Tax
| charges on or after 6th april 2009 |
rates % |
charges between 6th april 2008 and 5th april 2009 |
| 0 – £325,000 |
nil |
0 – £312,000 |
| above £325,000 |
40% |
above £312,000 |
|
lifetime chargeable transfers at half the death rate, ie 20%.
business property relief of 100% for all shareholdings in qualifying unquoted trading companies and for most unincorporated trading businesses; agricultural property relief at 100% for qualifying holdings of agricultural land.
annual exemption for lifetime gifts £3,000.
small gifts – annual amount per donee £250. |
|
| reduced tax charge on transfers within 7 years of death |
| years before death |
percentage of death rates |
| 0 – 3 |
100% |
| 3 – 4 |
80% |
| 4 – 5 |
60% |
| 5 – 6 |
40% |
| 6 – 7 |
20% |
| over 7 |
nil |
Value Added Tax
| standard rate (3/23 of vat-inclusive price) |
15% |
| registration level from 1.5.09 |
£68,000 per annum |
| deregistration level from 1.5.09 |
£66,000 per annum |
| standard rate rises to 17.5% on 1.1.10 |
| scale charges (from 1.5.09) |
| the scale charges for private use of business fuel change are based on the co2 emissions rating of the car. a different charge will apply for each 5g/km increase between 135g/km and 235g/km (max). for a 3 month period: |
| 120 or less |
£109.57 net |
£16.43 vat |
| 121-135 |
164.35 net |
24.65 vat |
| rising per 5g/km by approx* |
11.00 net |
1.65 vat |
| 235 or above |
383.48 net |
57.52 vat |
| * exact figures must be obtained from full table. rates will rise on 1.1.10 when the standard rate reverts to 17.5%. |
Capital Gains Tax
Capital Gains Tax
Annual exempt amount 2009/10: individuals £10,100, most trustees £5,050.
Net gains after all reliefs, losses and annual exempt amount are taxed at 18%.
Entrepreneurs’ relief
For disposals of sole trade or interest in a partnership trade, or shares in a trading company by an employee owning at least 5%, the gain (up to £1m lifetime allowance) is reduced to 5/9, to give an effective rate of CGT of 10%. Gains above the allowance are taxed at 18%.
Corporation Tax
|
year to 31.3.2010 and 31.3.2009 |
|
| main rate |
28% |
| profits above |
£1.5m |
|
| small companies rate |
21% |
| profits upto |
£300k |
|
| small/large marginal band |
£300k – £1.5m |
| fraction (effective rate) |
7/400 (29.75%) |
Main capital allowances
| allowance % |
| plant and machinery |
|
| – annual investment allowance £50,000 |
100 |
| – certain energy efficient plant, including low emission cars |
100 |
| – first year allowance for qualifying expenditure in 2009/10 |
40 |
| – writing down allowance: general |
20 |
| – writing down allowance: long life assets |
10 |
| – wda: features integral to a building |
10 |
| – cars with co2 rating up to 160g/km * |
20 |
| – cars with co2 rating over 160g/km * |
10 |
|
| * these rules apply to cars purchased on/after 1 april/6 april 2009. the old system of cheap/expensive cars has been abolished, but transitional rules cover existing expenditure. |
| industrial building allowances are being phased out: 4% in 2007/08; 3% in 2008/2009; 2% 2009/10; 1% 2010/2011; nil thereafter. |
Stamp Duty & Stamp Duty Land Tax
| rates on sales |
% of total consideration |
| shares and marketable securities (nil if value up to £1,000) |
0.5% |
| land |
0 – threshold |
nil |
|
threshold – £250,000 |
1% |
|
£250,001 – £500,000 |
3% |
|
£500,001 and over |
4% |
| the threshold is £175,000 for residential property and £150,000 for commercial property. from 1.1.10 the residential threshold is due to fall to £125,000 (general) or £150,000 ("disadvantaged areas"). |
Earliest due dates for payment of tax
| income tax |
|
| employment |
most tax paid under paye |
| interest, dividends |
lower/basic rate liability usually settled before receipt |
| untaxed sources, plus balance on employment and higher rates on investment income (self assessment) |
payments on account for 2009/10 on 31.1.10 and 31.7.10 based on 2008/09 tax; balance due 31.1.11 with first instalment for 2010/11. |
| capital gains tax |
31 january following the tax year. |
| inheritance tax |
normally 6 months after month of death. |
| corporation tax |
large companies pay by instalments starting 61/2 months through the accounting period; small/medium companies pay 9 months and 1 day after end of period. |
You are advised to consult us before acting on any information contained herein.
