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) 2007-08 (£)   2008-09 (£)
 
Income tax personal and age-related allowances
Personal allowance (age under 65) 5,225   5,435
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%* 0-36,000
Higher rate: 40% Over 34,600 Higher rate: 40%** Over 36,000

* 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) 2007-08 (%) 2008-09 (%)
£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

 


Rates and Allowances 2007-2008

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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