Income tax
| Tax rates |
Note |
2009/10 |
2008/09 |
| Savings starting rate band to |
£2,440 |
£2,320 |
| Savings starting tax band rate |
10% |
10% |
| Basic rate band to |
|
£37,400 |
£34,800 |
| Basic tax rate |
20% |
20% |
| Higher rate - taxable income over |
|
£37,400 |
£34,800 |
| Higher tax rate |
40% |
40% |
| UK dividend rate |
32.5% |
32.5% |
| Trusts |
|
|
| Trust rate |
40% |
40% |
| Schedule F 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 |
| |
Blind person's allowance |
|
£1,890 |
£1,800 |
| Allowances that reduce tax |
|
|
| Married couple's allowance (MCA) |
|
|
|
| |
75 and over |
1,2,3 |
£696.50 |
£662.50 |
| The age-related allowances are progressively withdrawn if income exceeds |
£22,900 |
£21,800 |
| Minimum PA |
£6,475 |
£6,035 |
| Minimum MCA tax reduction |
£267 |
£254 |
Non domicile charge
Charge for adult non UK domiciliary - applies after UK residence in seven or
more of the previous tax years |
£30,000 |
£30,000 |
| Tax Shelters |
|
|
|
Enterprise Investment Scheme (EIS) up to
|
£500,000 |
£500,000 |
| Maximum amount for EIS carry back |
£50,000 |
£50,000 |
|
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 rate - registered |
20% |
20% |
| Higher rate - not registered |
30% |
30% |
2010/11
A new 50% rate of income tax is introduced that will apply to taxable non-savings and savings income above £150,000.
The basic personal allowance will gradually be reduced to nil for individuals with adjusted net income above £100,000.
There will be three rates of tax for dividends - 20%, 32.5% and 42.5%.
Notes
- Ages are as the end of the tax year. Ages for the MCA relate to the elder of spouse or civil partner.
- MCA is available only to those couples where at least one spouse or civil partner was born before 6 April 1935.
- The higher rates of personal allowances are reduced by £1 for each £2 of excess income over £22,900 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 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).
Did you know?
That the Government expects to receive £140.5 billion from Income Tax in the current tax year (2008/09 £152.5 billion)
