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Tax Rates
Income Tax Rates
Tax Data 2008 / 2009
INCOME TAX RATES
Income Tax - taxable bands |
2008/09 (£) |
2007/08 (£) |
Starting rate: 10%: |
- |
£0 - £2,230 |
Basic rate: 20%: |
£0 - £36,000 |
- |
Basic rate: 22% |
- |
£2,230 - £34,600 |
Higher rate: 40% |
£36,000 + |
£34,600 + |
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*from 2008/09 only applicable on savings income where it is below £2,320. |
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Dividends |
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|
Basic rate taxpayers |
10% |
10% |
Higher rate taxpayers |
32.5% |
32.5% |
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Pre-owned assets tax (£5,000 taxable threshold) |
As income |
As income |
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Discretionary and Relevant Property Trusts* |
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Basic rate band |
1,000 |
1,000 |
Dividends (rate applicable to trusts - RAT) |
32.5% |
32.5% |
Other income (rate applicable to trusts - RAT) |
40% |
40% |
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*from 6/4/2008 A&M trusts can only be created by a parent's will, all other trusts will fall under the RPT regime. |
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Interest In Possession Trusts |
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Dividends |
10% |
10% |
Savings |
20% |
20% |
Other income |
20% |
22% |
INCOME TAX RELIEFS
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2008/09 (£) |
2007/08 (£) |
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Given at marginal rate of income tax |
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Personal allowance (minimum) |
5,435 |
5,225 |
|
Personal allowance (age 65-74) |
9,030 |
7,550 |
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Personal allowance (age 75+) |
9,180 |
7,690 |
Relief restricted to 10% |
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Married couples/Civil partnerships allowance |
6,535 |
6,285 |
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Married couples/Civil partnerships allowance (age 75+) |
6,625 |
6,365 |
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Married couples/Civil partnerships allowance (minimum) |
2,540 |
2,440 |
Age related relief's abated by £1 for every £2 of income over |
21,800 |
20,900 |
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Blind Person's Allowance |
1,800 |
1,730 |
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Rent-a-room tax free home income* |
4,250 |
4,250 |
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*restricted to £2,150 if letting jointly. |
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Child Tax Credit (CTC) |
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Family element |
545 |
545 |
Family element baby addition |
545 |
545 |
Child element |
2,085 |
1,845 |
Disabled child element |
2,540 |
2,440 |
Severely disabled child element |
1,020 |
980 |
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Working Tax Credit (WTC) |
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|
Basic element |
1,800 |
1,730 |
Couples & lone parent element |
1,770 |
1,700 |
30 hour element |
735 |
705 |
Disabled worker element |
2,405 |
2,310 |
Severe disability element |
1,020 |
980 |
50+ return to work payment (16-29 hours) |
1,235 |
1,185 |
50+ return to work payment (30+ hours) |
1,840 |
1,770 |
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Childcare Element of WTC |
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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% |
Withdrawal Rates for CTC & WTC |
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|
First income threshold |
6,420 |
5,220 |
First income threshold for CTC only |
15,575 |
14,495 |
First withdrawal rate |
39% |
37% |
Second income threshold |
50,000 |
50,000 |
Second withdrawal rate |
6.67% |
6.67% |
Income increase disregarded |
25,000 |
25,000 |
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Limits for other relief's |
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Enterprise Investment Scheme (EIS) at 20% |
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Maximum Investment |
500,000 |
400,000 |
EIS capital gains re-investment |
Unlimited |
Unlimited |
Venture Capital Trusts (VCT) @ 30% |
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Maximum Investment |
200,000 |
200,000 |
For information of users: This material is published for the information of clients. It provides only an overview of the regulations in force at the date of publication, and no action should be taken without consulting the detailed legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material can be accepted by the authors or the firm.
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