Rates and Allowances

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)	2009-10 (£)	2008-09 (£)

Income tax personal and age-related allowances
Personal allowance (age under 65)	6,475	6,035
Personal allowance (age 65-74)	9,490	9,030
Personal allowance (age 75 and over)	9,640	9,180
Married couple's allowance* (aged less than 75 and born before 6th April 1935)	**	6,535
Married couple's allowance* (age 75 and over)	6,965	6,625
Married couple's allowance* - minimum amount	2,670	2,540
Income limit for age-related allowances	22,900	21,800
Blind person’s allowance	1,890	1,800

Capital gains tax annual exempt amount
Individuals etc.	10,100	9,600
Most trustees	5,050	4,800

Individual inheritance tax allowance	325,000	312,000

Pension schemes allowances
Annual Allowance	245,000	235,000
Lifetime Allowance	1,750,000	1,650,000

* Married couple's allowance is given as a 10% tax credit.

** In the 2009-10 tax year all in this category will become 75 at some point and will therefore be entitled to the age 75 and over allowance.

Income tax: Taxable bands

2009-10	£ per year	2008-09	£ per year
Starting rate: 10%*	0-2,440	Starting rate: 10%*	0-2,320
Basic rate: 20%	0-37,400	Basic rate: 20%*	0-34,800
Higher rate: 40%**	Over 37,400	Higher rate: 40%**	Over 34,800

* There is a 10p starting rate for savings income only. If an individual's non savings taxable income exceeds the starting rate limit, the 10p starting rate for savings will not be available for savings income.

Corporation tax on profits

£ per year (unless stated)	Y/E 31.03.2010 (%)	Y/E 31.03.2009 (%)
£0-£300,000	21	21
£300,001 - £1,500,000	Marginal relief	Marginal relief
£1,500,001 or more	28*	28*

* For companies with ring fence profits the small companies' rate of tax on those profits remains at 19 per cent and the MSCR fraction 11/400 for financial years starting 1 April 2007, 2008 and 2009, and the main rate 30 per cent for financial years starting on 1 April 2008 and 2009. Ring fence profits mean the income and gains from oil extraction activities or oil rights in the UK and UK Continental Shelf.

National insurance contributions

£ per week (unless stated)	2009-10	2008-09
Lower earnings limit, primary Class 1	£95	£90
Upper earnings limit, primary Class 1	£844	£770
Upper accruals point	£770	n/a
Primary threshold	£110	£105
Secondary threshold	£110	£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	£2.40	£2.30
Class 2 small earnings exception (per year)	£5,075	£4,825
Special Class 2 rate for share fishermen	£3.05	£2.95
Special Class 2 rate for volunteer development workers	£4.75	£4.50
Class 3 rate (per week)	£12.05	£8.10
Class 4 lower profits limit (per year)	£5,715	£5,435
Class 4 upper profits limit (per year)	£43,875	£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)	2009-10	2008-09

Working Tax Credit
Basic element	£1,890	£1,800
Couple and lone parent element	£1,860	£1,770
30 hour element	£775	£735
Disabled worker element	£2,530	£2,405
Severe disability element	£1,075	£1,020
50+ Return to work payment (16-29 hours)	£1,300	£1,235
50+ Return to work payment (30+ hours)	£1,935	£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	£2,235	£2,085
Disabled child element	£2,670	£2,540
Severely disabled child element	£1,075	£1,020

Income thresholds and withdrawal rates
First income threshold	£6,420	£6,420
First withdrawal rate	39%	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	£16,040	£15,575
Income disregard	£25,000	£25,000

Child benefit and guardian’s allowance rates from 6 April 2008

£ per week	2009-10 (£)	2008-09 (£)
Eldest/Only Child	20.00	18.80
Other Children	13.20	12.55
Guardian’s Allowance	14.10	13.45

Rates and Allowances 2008-2009

To view last years rates and allowances tables click here

Published with the consent of HMSO - Inland Revenue copyright is acknowledged

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Over the past 10 years we believed that if we wanted outstanding service we should use traditional large accountancy firms. Oh how wrong we had been! We had been charged high fees without any real value being added to the business.
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