Dividends and interest-treated as top and next-to-top slices of income respectively. Tax credit (TC)=1/9x divident
Income falling in
SR band
BR band
HR band
Dividends (+TC)
10%
10%
32,5%
Interest (gross)
10%
20%
40%
Allowances and Reliefs
£ (GBP)
Personal allowance
4,895
Married couple's
allowance
nil
Additional
personal allowance
nil
Children's
Tax Credit
nil
Children's
Tax Credit - baby rate
nil
Age allowance
Single person
aged 65-74
7,090
aged 75 and over
7,220
Married couple's allowance
aged 65-74
5,905*
aged 75 and over
5,975*
Age allowance reduced by 1/2
of income over
19,500
Blind person's
allowance
1,610
*Relief restricted to 10%
**Relief restricted to 10% and reduced for higher rate taxpayers
Corporation Tax
Year to 31 March
Taxable profit
£ (GBP)1-£ (GBP)10,000
0%
£ (GBP)10,001-£ (GBP)50,000*
23,75%
£ (GBP)50,001-£ (GBP)300,000
19%
£ (GBP)300,001-£ (GBP)1,500,000**
32,75%
Over £ (GBP)1,500,001
30%
*Marginal relief fraction
19/400
**Marginal relief fraction
11/400
Capital Allowances
Plant and machinery; patents; know-how
Writing-down Allowance
Generally (car maximum £ (GBP)3,000 pa)
25%
Certain - Long Life assets
6%
First year/Initial Allowance
- small businesses
40%
- medium businesses
40%
- any businesses on energy-saving plant
100%
Industrial and agricultural buildings
Writing-down Allowance
4%
Commercial buildings in Enterprise Zones
Initial Allowance
100%
Capital Gains Tax
£ (GBP)
Annual exemption (AE)
- individuals
8,500
- trustees
4,250
Gains in excess of AE taxed as if additional income
- individuals
- up to SR limit
10%
- between SR limit and HR threshold
20%
- above HR threshold
40%
- trustees
40%
Chattels exemption
6,000
Indexation allowance was frozen at 05.04.98 for individuals
Number of complete years after 5.04.98 for which asset held
Business assets chargeable for disposals
Business assets equivalent tax rate for higher rate taxpayer
Non business assets chargeable for disposals
%
%
%
0
100
40
100
1
50
20
100
2
25
10
100
3
25
10
95
4
25
10
90
5
25
10
85
6
25
10
80
7
25
10
75
8
25
10
70
9
25
10
65
10 or more
25
10
60
Company Car Scale Charges
For 2005/2006 the company car scale charge are:
-15% of the list price if emissions< 140g/km
-1% increase per additional emissions of 5g/km
-maximum benefit is 35% of list price where emissions > 240g/km
-for diesel engines add 3% unless engine meets EuroIV emissions standard (max benefits is 35%)
Car fuel benefit
Sience 6 April 2003 car fuel benefit is based on a percentage of a set figure, which fo 2005/06 is £ (GBP)14,400.
Inland Revenue Mileage Rates
Approved Inland Revenue tax-free mileage rates
Mileage
For 2005/2006
Up to 10,000 miles
40p
Over 10,000 miles
25p
Employment Benefits
Applies to most directors and all employees earning at a rate of £ (GBP)8,500 p.a. or more.
Beneficial loans
Official rate of interest for 2005/2006 - 5%.
Use of assets
Benefit is 20% of market value or cost to employer (if greater) plus relevant expenses. Special rules for property.
Individual Savings Accounts
No tax on interest, dividens or capital gains
Maximum annual investment
Ј(GBP
Mini - Cash
up to 3,000
- Life insurance
up to 1,000
- Stocks and shares
up to 3,000
Maxi - Cash
up to 3,000
- Life insurance
up to 1,000
- Stocks and share
balance to 7,000
Charity Taxation
There is no
minimum amount for a Gift Aid donation and all cash donations, of whatever
size, made by a UK taxpayer are eligible for Gift Aid relief.
Tax relief is available to individuals and companies for gifts of real property shares and securities to charities. Higher rate taxpayers can carry back their gift aid payment to the previous year.
Individuals will be able, from 2003/04, to nominate a charity on their tax return to receive any refunnd they are due to receive.
VAT
From 1.4.2005
Standard Rate
17.5%
Fuel and Power
Rate
5%
Installation
of energy saving material
5%
VAT on fraction
of gross price
7/47
Certain housing
refurbishment work
5%
Annual Turnover
Limits*
(based on previous 12 months)
Registration
£ (GBP) 60,000
Deregistration
£ (GBP) 58,000
Inland Revenue Interest Rates
Income Tax/Capital Gains Tax
- late paid
tax
7.5%
- over paid
tax
3.5%
Corporation
tax - periods ended post 30.6.99
- late paid
tax
7.5%
- over paid
tax
4%
Corporation
Tax quarterly instalment payments
- under paid
instalments
5.75%
- over paid
instalments
4.5%
Inheritance
Tax
4%
VAT
- on under
declaration
7.5%
- on official
errors
4%
These rates
are effective from 6 September 2004
National Insurance Contributions
Class 1 Employed:
Employee's contributions 11%:
-on weekly earnings between £ (GBP)94.01 - £ (GBP)630
-1% on weekly earnings above £ (GBP)630
Employee's contracted-out rebate 1.6%
Married woman's reduce rate 4.85%:
-on weekly earnings between £ (GBP)94 - £ (GBP)630
-1% on weekly earnings above £ (GBP)630
Employer's contributions 12.8%:
-on weekly earnings over £ (GBP)94
Employer's contracted-out rebate:
-salary related 3.5%
-money purchase 1%
Classes 1A+ 1B Employer:
12,8% on (A) Car, car fuel and other taxable benefits
12,8% on (B) PAYE settlement agreements
Class 2 Self-employed:
Weekly rate £ (GBP)2.10 once earnings over £ (GBP)4,345 p.a.
Class 3 Voluntary:
Weekly rate £ (GBP)7.35
Class 4 Self-emloyed:
8% on annual profits between £ (GBP)4,895 - £ (GBP)32,760
1% on annual profits above £ (GBP)32,760
National Minimum Wage
From October 2005
Workers
per hour
21 years +
£ (GBP)5.05
18-21 years
£ (GBP)4.25
16-17 years
£ (GBP)3.00
Personal Pensions
Contribution limit - 0% of net relevant earnings
Age on 6 April
2005
PPS
RAP*
Under 36
17.5
17.5
36-45
20.0
17.5
46-50
25.0
17.5
51-55
30.0
20.0
56-60
35.0
22.5
61 and over
40.0
27.5
N.R.E. cap for P.P.S. 2004/05: £ (GBP)102,000 2005/06: £ (GBP)105,600
*Retirement annuity policy limits apply to policies effected before 1 July 1988.
Stakeholder pensions allow individuals to contribute up to £ (GBP)3,600 per annum irrespective of earnings or age.
Stamp Duty
Shares and Securities
0,5%
Transfers of property, Stamp Duty Land Tax
Value of property, Residential and Non-residential
Rate
£ (GBP)
%
1-120,000
nil
120,001-250,000
1
250,001-500,000
3
Over 500,000
4
There is a stamp duty exemption for certain residental property purhases in "disadvantaged" areas for consideration up to £ (GBP) 150,000
There is a stamp duty exemption for all non-residental property purhases in "disadvantaged" areas.
