Rates and Allowances 2008/2009
Rates and allowances set for various types of tax are set out below.
Income tax, capital gains tax, and inheritance tax
| £ per year (unless stated) |
2007-08 (£) |
|
2008-09 (£) |
| |
| Income tax personal and age-related allowances |
| Personal allowance (age under 65) |
5,225 |
|
6,035 |
| Personal allowance (age 65-74) |
7,550 |
|
9,030 |
| Personal allowance (age 75 and over) |
7,690 |
|
9,180 |
| Married couple's allowance* (aged less than 75 and born before 6th April 1935) |
6,285 |
|
6,535 |
| Married couple's allowance* (age 75 and over) |
6,365 |
|
6,625 |
| Married couple's allowance* - minimum amount |
2,440 |
|
2,540 |
| Income limit for age-related allowances |
20,900 |
|
21,800 |
| Blind person’s allowance |
1,730 |
|
1,800 |
| |
| Capital gains tax annual exempt amount |
| Individuals etc. |
9,200 |
|
9,600 |
| Most trustees |
4,600 |
|
4,800 |
| |
|
|
|
| Individual inheritance tax allowance |
300,000 |
|
312,000 |
| |
| Pension schemes allowances |
| Annual Allowance |
225,000 |
|
235,000 |
| Lifetime Allowance |
1,600,000 |
|
1,650,000 |
* Married couple's allowance is given as a 10% tax credit.
Income tax: Taxable bands
| 2007-08 |
£ per year |
2008-09 |
£ per year |
| Starting rate: 10% |
0-2,230 |
- |
- |
| Basic rate: 22% |
2,231-34,600 |
Basic rate: 20%* |
0-34,800 |
| Higher rate: 40%** |
Over 34,600 |
Higher rate: 40%** |
Over 34,800 |
* Savings Income only: If your savings income is less than £2,320 in the year, you are taxed at 10%. ** Dividend Income: Dividends are still taxed at 10% unless you are a higher rate taxpayer when you pay 32.5% on the higher rate element.
Corporation tax on profits
| £ per year (unless stated) |
Y/E 31.03.2008 (%) |
Y/E 31.03.2009 (%) |
| £0-£300,000 |
20 |
21 |
| £300,001 - £1,500,000 |
Marginal relief |
Marginal relief |
| £1,500,001 or more |
30 |
28 |
National insurance contributions
| £ per week (unless stated) |
2007-08 |
2008-09 |
| Lower earnings limit, primary Class 1 |
£87 |
£90 |
| Upper earnings limit, primary Class 1 |
£670 |
£770 |
| Primary threshold |
£100 |
£105 |
| Secondary threshold |
£100 |
£105 |
| Employees’ primary Class 1 rate between primary threshold and upper earnings limit |
11% |
11% |
| Employees’ primary Class 1 rate above upper earnings limit |
1% |
1% |
| Employees’ contracted-out rebate - salary-related schemes |
1.6% |
1.6% |
| Employees’ contracted-out rebate - money-purchase schemes |
1.6% |
1.6% |
| Married women’s reduced rate between primary threshold and upper earnings limit |
4.85% |
4.85% |
| Married women’s rate above upper earnings limit |
1% |
1% |
| Employers’ secondary Class 1 rate above secondary threshold |
12.8% |
12.8% |
| Employers’ contracted-out rebate, salary-related schemes |
3.7% |
3.7% |
| Employers’ contracted-out rebate, money-purchase schemes |
1.4% |
1.4% |
| Class 2 rate |
£2.20 |
£2.30 |
| Class 2 small earnings exception (per year) |
£4,635 |
£4,825 |
| Special Class 2 rate for share fishermen |
£2.85 |
£2.95 |
| Special Class 2 rate for volunteer development workers |
£4.35 |
£4.50 |
| Class 3 rate (per week) |
£7.80 |
£8.10 |
| Class 4 lower profits limit (per year) |
+£5,225 |
£5,435 |
| Class 4 upper profits limit (per year) |
£34,840 |
£40,040 |
| Class 4 rate between lower profits limit and upper profits limit |
8% |
8% |
| Class 4 rate above upper profits limit |
1% |
1% |
Working and child tax credits rates
| £ per year (unless stated) |
2007-08 |
|
2008-09 |
| |
| Working Tax Credit |
| Basic element |
£1,730 |
|
£1,800 |
| Couple and lone parent element |
£1,700 |
|
£1,770 |
| 30 hour element |
£705 |
|
£735 |
| Disabled worker element |
£2,310 |
|
£2,405 |
| Severe disability element |
£980 |
|
£1,020 |
| 50+ Return to work payment (16-29 hours) |
£1,185 |
|
£1,235 |
| 50+ Return to work payment (30+ hours) |
£1,770 |
|
£1,840 |
| |
| Childcare element of the Working Tax Credit |
| Maximum eligible cost for one child |
£175 per week |
|
£175 per week |
| Maximum eligible cost for two or more children |
£300 per week |
|
£300 per week |
| Percentage of eligible costs covered |
80% |
|
80% |
| |
| Child Tax Credit |
| Family element |
£545 |
|
£545 |
| Family element, baby addition |
£545 |
|
£545 |
| Child element |
£1,845 |
|
£2,085 |
| Disabled child element |
£2,440 |
|
£2,540 |
| Severely disabled child element |
£980 |
|
£1,020 |
| |
| Income thresholds and withdrawal rates |
| First income threshold |
£5,220 |
|
£6,420 |
| First withdrawal rate |
37% |
|
39% |
| Second income threshold |
£50,000 |
|
£50,000 |
| Second withdrawal rate |
6.67% |
|
6.67% |
| First threshold for those entitled to Child Tax Credit only |
£14,495 |
|
£15,575 |
| Income disregard |
£25,000 |
|
£25,000 |
Child benefit and guardian’s allowance rates from 6 April 2008
| £ per week |
2007-08 (£) |
2008-09 (£) |
| Eldest/Only Child |
18.10 |
18.80 |
| Other Children |
12.10 |
12.55 |
| Guardian’s Allowance |
12.95 |
13.45 |
Published with the consent of HMSO - Inland Revenue copyright is acknowledged
