2012 Tax Cards

Main Reliefs

Allowed at top rate of tax 2012/13 20011/12
Personal allowance (PA) £8,105 £7,475
Personal allowance (65-74)* 10,500 9,940
Personal allowance (75 and over)* 10,660 10,090
Blind person’s allowance 2,100 1,980
Allowed only at 10%
married couple’s allowance (MCA)*
(only available if born before 6th April 1935)
7,705 7,295
income limit for age-related allowances 25,400 24,000
 

*AA reduced by £1 for every £2 by which income exceeds limit.

Personal AA reduced before MCA until equal to normal PA.

MCA reduced to minimum £2,960 (2011/12: £2,800).

PA is withdrawn at £1 for every £2 by which total income exceeds £100,000

(PA is nil at income of £116,210 or more).

Rate Bands

2011/12 2011/12
basic rate band (BRB) 34,370 35,000
higher rate band (HRB) 34,371-150,000 35,001-150,000
Additional Rate over 150,000 over 150,000
* BRB and HRB extended by Gift Aid donations and pension contributions up to permitted limit..
Tax rates
rates differ for general/interest/dividends
2012/13 and 2011/12
G S D
basic rate 20% 20% 10%
higher rate 40% 40% 32.5%
Additional Rate 50% 50% 42.5%

General income (salary, pension, profit, rent) uses lower rate bands first, then savings (interest), then dividends. UK dividends received are 90% of taxable amount with 10% tax credit.

If taxable general income is less than £2,710 (2011/12: £2,560), savings income is taxed at a ‘starting rate’ of 10% until total taxable income exceeds that limit. This ‘starting rate band’ is part of the BRB.

Pension Contributions

Maximum annual tax-efficient gross contributions to age 75
individuals £3,600 or 100% of earnings to £50,000
employers £50,000 less employee contributions

Maximum tax-efficient fund on taking benefits in 2012/13: £1.5m.

Only current earnings count for the 100% limit. Extra contributions above £50K may use unused £50K limit of preceding three years.

Most personal pension contributions are paid net of basic rate tax.

Annual Investment Limits

  2012/13 2011/12
Individual Savings Account £11,280 £10,680
Junior ISA 3,600 3,600
Enterprise Investment Scheme **1,000,000 **500,000
Venture Capital Trust **200,000 **200,000
Seed Enterprise Investment Scheme *100,000 N/A

** Relief at 30%
* Relief at 50%

National Insurance Contributions

class 1 (employees)
From 6.4.2012, only employment with a salary-related pension scheme can use the lower contracted-out NIC rates.
contracted in contracted out
 
employee contributions
– on earnings between £146.01 – £770pw 12.0% 10.6%
– on earnings between £770.01 – £817pw 12.0% 12.0%
– on earnings above £817pw 2.0% 2.0%
employer contributions
– on earnings between £144.01 and £770pw 13.8% 10.4%
– on earnings above £770pw 13.8% 13.8%
Employer contributions (at 13.8%) are also due on most taxable benefits (Class 1A) and on tax paid on an employee’s behalf under a PAYE settlement agreement (Class 1B).
class 2 (self-employed)
flat rate per week £2.65
small earnings exception: profits per annum £5,595
class 3 (voluntary)
flat rate per week £13.25
class 4 (self-employed)
on profits £7,605 – £42,475 9.0%
on profits over £42,475 2.0%

Car Benefit Assessment

Taxable benefit is chargeable value multiplied by chargeable percentage.
Chargeable value: initial list price of car (incl. accessories).
Chargeable percentage: Electric car with no emissions: 0%

CO2 ratings petrol diesel
1-75g/km 5% 8%
76-99g/km 10% 13%
100-104g/km 11% 14%
– increasing by 1% at 105, 110, 115 etc., until the max. 35% (petrol or diesel).

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 £18,000 (2009/10: £16,900). The taxable amount is therefore between £900 (min) and £6,300 (max).

Vans

Chargeable value of £3,000 if private use is more than home-to-work.

Car fuel

Employer provides fuel for private motoring in an employer-owned:
car: CO2-based percentage from above table multiplied by £20,200.
van: £550.

Employee contributions for fuel do not reduce taxable figure unless all private fuel is paid for.

Tax Free Mileage Allowances

  higher rate lower rate
2012/13
all cars   45p 25p
motorcycles   24p 24p
bicycles   20p 20p
business passengers   5p 5p
Higher rate allowed up to 10,000 business miles.

Company cars

Advisory rate to cover fuel cost (rates change several times a year)

From 1.3.2012 (From 1.12.2011 to 29.2.2012)

petrol lpg diesel  
up to 1400cc 15p (15p) 10p (9p) Up to 1600cc 13p (12p)
1401 – 2000cc 18p (18p) 12p (10p) 1601 – 2000cc 15p (15p)
over 2000cc 26p (26p) 17p (15p) Over 2000cc 19p (18p)
These figures usually change on 1 June and 1 December each year.

Inheritance Tax

charges on or after 6th april 2009 rates %
0 – £325,000 nil Nil band frozen
above £325,000 40% until 2014/15
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. Tapering relief applies to reduce the tax on transfers within 7 years of death. The reduction in tax is 20% for survivorship of 3-4 years, 40% for 4-5 years, 60% for 5-6 years and 80% for 6-7 years.

Value Added Tax

Standard rate (1/6 of VAT-inclusive price) 20%
registration level from 1.4.12 £77,000 per annum
deregistration level from 1.4.12 £75,000 per annum
scale charges
The scale charges for private use of business fuel are based on the CO2 emissions rating of the car. A different charge will apply for each 5g/km increase between 120g/km and 225/km (max). For a 3 month period starting after 30 April 2012:
120 or less £138.54 net £27.71 VAT
130 208.33 net 41.67 VAT
rising per 5g/km by approx* 13.91 net 2.78 VAT
225 or above 486.46 net 97.29 VAT
* exact figures must be obtained from full table.

Corporation Tax

Year to 31.3.2013 31.3.2012
main rate 24% 26%
profits above £1.5m £1.5m
small companies rate 20% 20%
profits upto £300k £300k
small/large marginal band £300k – £1.5m £300k – £1.5m
fraction (effective rate) 1/100 (25%) 3/200 (27.50%)

Main capital allowances

Allowance %
plant and machinery
– annual investment allowance £25,000 100
– certain energy efficient plant, including low emission cars 100
– writing down allowance: general pool 18
– writing down allowance: special rate pool 8
*will fall to £25,000 on 1.4.12 (companies) or 6.4.12 (income tax traders); WDA fall to 18%/8% at same date.

The special rate pool includes long life assets, integral plant in buildings, thermal insulation and cars with CO2 emissions over 160g/km. The general pool contains other plant and machinery.

The rates changed in April 2012 and care is required where a period of account straddles the change.

Capital Gains Tax

  2012/13 2011/12
Annual exempt amount £10,600 £10,600
Tax Rate
– basic rate taxpayer 18% 18%
– higher rate taxpayer 28% 28%
– Entrepreneurs’ Relief (ER) 10% 10%

Net gains after losses, all reliefs and annual exemption are added to taxable income to determine the applicable CGT rate. ER is available for lifetime gains of up to £10m on disposals of sole trade, interest in partnership trade, or shares in a trading company by an officer or employee owning at least 5%.

Trustees receive up to half the annual exemption and pay at a flat rate of 28%.

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 (all properties) 4%
Over £1M (residential from 6.4.2011) 5%
Over £2m (residential) 7%
The threshold is:
£125,000 general residential property
£150,000 residential in “disadvantaged areas”
£150,000 commercial property

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 2012/13 on 31.1.13 and 31.7.13 based on 2011/12 tax; balance due 31.1.14 with first instalment for 2013/14.
capital gains tax 31 January following the tax year with self-assessment income tax.
inheritance tax normally 6 months after month of death.
corporation tax Large companies pay by instalments starting 6 1/2 months through the accounting period; small/medium companies pay 9 months and 1 day after end of period.

Useful Rates

2012/13
Basic Retirement Pension
Single person £107.45
Married couple 171.85
Child Benefit
First eligible child 20.30
Each subsequent child 13.40
Example rates:
Child Tax Credits
Family element 545
Threshold for withdrawal 15,860
National Minimum Wage
From 1 October 2012 – 21 and over 6.19
From 1 October 2011 – 21 and over 6.08
Rate for workers aged 18-20 (unchanged) 4.98