INCOME TAX RATES |
|
|
2006/07 (£) |
2005/06 (£) |
|
| Starting rate 10% on first |
2,150 |
2,090 |
| Basic rate (20% for savings income) 22% on next |
31,150 |
30,310 |
| Higher rate 40% on income over |
33,300 |
32,400 |
| Dividends: |
basic rate taxpayers |
10% |
10% |
|
higher rate taxpayers |
32.5% |
32.5% |
Pre-owned assets tax (£5,000 minimum taxable) |
As income |
As income |
| Trusts: |
basic rate band |
1000 |
500 |
| |
dividends (rate applicable to trusts - RAT) |
32.5% |
32.5% |
| other income (rate applicable to trusts - RAT) |
40% |
40% |
Top
INCOME TAX ALLOWANCES, RELIEFS AND CREDITS |
|
|
2006/07 (£) |
2005/06 (£) |
|
| Personal (minimum) |
5,035 |
4,895 |
| Personal (age 65-74) |
7,280 |
7,090 |
| Personal (age 75 and over) |
7,420 |
7,220 |
| Married couple’s/civil partnership’s (minimum) at 10% * |
2,350 |
2,280 |
| Married couple’s/civil partnership’s (age under 75) at 10% * |
6,065 |
5,905 |
| Married couple’s/civil partnership’s (age 75 and over) at 10% * |
6,135 |
5,975 |
| Age related relief reduced by 50% of income over |
20,100 |
19,500 |
| Child tax credit (CTC) – family element: |
545 |
545 |
| CTC – family element baby addition |
545 |
545 |
| CTC usually reduced by 6.67% of joint income over |
50,000 |
50,000 |
| Childcare and childcare tax vouchers (weekly entitlement) |
55 |
50 |
| Blind person’s allowance |
1,660 |
1,610 |
| Rent-a-room tax-free income |
4,250 |
4,250 |
| Pensions earnings cap |
215,000 |
105,600 |
| Venture capital trust (VCT) at 30%. |
**200,000 |
**200,000 |
| Enterprise investment scheme (EIS) at 20% |
400,000 |
200,000 |
| EIS eligible for capital gains tax re-investment relief |
No Limit |
No Limit |
| * Where either claimant was born before 6 April 1935 |
|
|
| ** for shares issued on or after 6 April 2006 |
|
|
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CAPITAL GAINS TAX - Rates and Allowances |
|
|
2006/07 (£) |
2005/06 (£) |
|
Annual exemption
individuals, personal representatives *
settlements |
8,800
4,400
|
8,500
4,250
|
|
CGT rate
Individuals - 10% / 20% / 40%
Settlements - 40%
* Year of death and two subsequent years of assessment |
|
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| Replacement of Indexation with the Tapering of Chargeable Gains (not Companies) - Disposals on or before 5 April 2000 |
Indexation has been replaced by a taper which reduces the amount of the chargeable gain the longer an asset is held after 5 April 1998. For gains realised after 5 April 1998, indexation will be given for periods up to April 1998, but not thereafter. The taper, which is more generous for business assets than for non-business assets, together with equivalent tax rates is: |
|
Gains on business assets |
Gains on non-business assets |
|
Complete years after
5 April 98 |
% of gain chargeable |
Equivalent tax rates
% |
Complete years after
5 April 98 |
% of gain chargeable |
Equivalent
tax rates
% |
|
|
|
Higher |
Basic |
|
|
Higher |
Basic |
|
| 0 |
100.0 |
40 |
23.00 |
0 |
100 |
40 |
23.00 |
| 1 |
92.5 |
37 |
21.27 |
1 |
100 |
40 |
23.00 |
| 2 |
85.0 |
34 |
19.55 |
2 |
100 |
40 |
23.00 |
| 3 |
77.5 |
31 |
17.82 |
3 |
95 |
38 |
21.85 |
| 4 |
70.0 |
28 |
16.10 |
4 |
90 |
36 |
20.70 |
| 5 |
62.5 |
25 |
14.37 |
5 |
85 |
34 |
19.55 |
| 6 |
55.0 |
22 |
12.65 |
6 |
80 |
32 |
18.40 |
| 7 |
47.5 |
19 |
10.92 |
7 |
75 |
30 |
17.25 |
| 8 |
40.0 |
16 |
9.20 |
8 |
70 |
28 |
16.10 |
| 9 |
32.5 |
13 |
7.47 |
9 |
65 |
26 |
14.95 |
| 10 or more |
25.0 |
10 |
5.75 |
10 or more |
60 |
24 |
13.80 |
|
| Disposals after 5 April 2000 |
| (i) Gains on business assets |
|
|
|
Effective tax rate, per cent |
| No. of years |
Percentage of gain chargeable |
Higher rate
taxpayer |
Basic rate
taxpayer |
|
| 0 |
100 |
40 |
20 |
| 1 |
87 ½ |
35 |
17 ½ |
| 2 |
75 |
30 |
15 |
| 3 |
50 |
20 |
10 |
| 4+ |
25 |
10 |
5 |
|
Any size of shareholding of employees qualify. Non-employees must hold at least 5% of the voting rights.
Business assets taper is to be extended to include shares held by employees of non-trading companies. Holdings can't be over 10%. |
| (ii) Gains on non-business assets - no change |
|
| Disposals after 5 April 2002 |
| (i) Gains on business assets |
|
| Whole years asset held |
Proposed new rates (disposals from 6 April 2002) |
| |
Percentage of gain
charged to tax |
Effective rate of tax for
higher rate taxpayer |
|
| Less than 1 |
100 |
40 |
| 1 |
50 |
20 |
| 2 |
25 |
10 |
| 3 |
25 |
10 |
| 4+ |
25 |
10 |
|
| (ii) Gains on non-business assets - no change |
|
Top
CAPITAL ALLOWANCES |
|
First Year/Initial Allowances |
Writing-down allowance |
|
| Plant and Machinery |
50% * |
25% reducing balance |
| Plant and Machinery |
40% ** |
25% reducing balance |
| Industrial Buildings |
N/A |
4% straight line |
| Agricultural Buildings |
N/A |
4% straight line |
| Enterprise Zone |
100% |
25% reducing balance |
| Scientific Research |
100% |
N/A |
| Energy-saving equipment |
100% *** |
N/A |
| Low emission cars |
100% **** |
N/A |
|
* Only available to small businesses
** Only available to medium sized businesses
*** Equipment must be included in Energy Technology List.
**** Car registered on / after 17 April 2002 and emits no more than 120gm/km CO2 or is electrically propelled.
|
|
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PENSIONS |
06/07 'Simplified Regime' |
|
| Lifetime allowance * |
£1,500,000 |
| Lifetie allowance charge |
55% if excess is drawn as cash |
| |
25% if excess is drawn as income |
| Annual allowance |
£215,000 |
| Annual allowance charge |
40% of excess |
| Max. relievable personal contribution |
100% of relevant UK earnings or |
| |
£3,600 if greater |
| Max. tax-free cash* |
25% of pension benefit value |
| |
|
| * subject to transitional protection for excess amount |
| |
|
| 05/06 max. contributions as % of net relevant earnings |
|
| Age on 6 April |
35 or less |
36-45 |
46-50 |
51-55 |
56-60 |
61-74 |
| Personal pension (PP) |
17.5% |
20.0% |
25.0% |
30.0% |
35.0% |
40.0% |
| Retirement annuity |
17.5% |
17.5% |
17.5% |
20.0% |
22.5% |
27.5% |
|
Top
ENTERPRISE INVESTMENT SCHEME |
2006/07
Maximum investment £400,000.
Tax relief given at 20%.
Maximum carry back to previous tax year is lower of £50,000 or half the amount invested to 5 October. |
|
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INHERITANCE TAX |
Rates on cumulative transfers - 2006/07
First £285,000 @ nil%
Excess @ 40% |
|
| Exemptions |
£ |
|
| Annual gifts per donor |
3,000 |
| Small gifts per donee |
250 |
|
| For marriage |
|
|
| - parent |
5,000 |
| - grandparent |
2,500 |
| - other |
1,000 |
|
Gifts to individuals and certain trusts made more than seven years before death. |
|
| Charge on gifts within seven years of death |
|
| Intervening years |
0-3 |
3-4 |
4-5 |
5-6 |
6-7 |
| % of full charge |
100 |
80 |
60 |
40 |
20 |
|
Top
CORPORATION TAX |
|
Financial Year |
2006/07
(to 31.3.07) |
2005/06
(to 31.3.06) |
|
| Full rate |
|
|
| Profits over £1,500,000 |
30% |
30% |
| £0-£10,000 * |
19% |
**0% |
|
Effective marginal rate
on profits between
£10,001 and £50,000 * |
19%
|
**23.75%
|
|
| Marginal relief fraction |
19/400 |
19/400 |
|
| £50,001 and £300,000 |
19% |
19% |
|
Effective marginal rate
on profits between
£300,000 and £1,500,000 |
32.75% |
32.75% |
|
| Marginal relief fraction |
11/400 |
11/400 |
|
* Full rate of tax always applies to close investment holding companies.
** MInimum 19% on profits distributed to non corporate shareholders. |
|
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CHARITABLE GIVING |
|
Financial Year |
2006
(to 5.4.07) |
2005
(to 5.4.06) |
|
| Give as you earn - gross max |
No max |
No max |
|
Gift Aid -net -min
- no maximum |
No min |
No min |
|
| Covenanted donations (min duration of convenant 3 yrs) |
No limit |
No limit |
|
Note: Gift Aid and covenanted donations require deduction of tax at source. If however, an individual has taxed income equal to, or in excess of gross donation, no tax is payable. |
|
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CAR SCALE BENEFIT - TO 2006/07 |
| New rules for taxing company cars came into effect from 6 April 2002. See the table below for calculation details. Taxable amount based on car's list price when new up to £80,000. Charge varies according to CO2 emissions |
Car benefit charges for cars with an approved CO2 emissions figure in grammes per kilometre.
|
|
CO2 emissions in grams per kilometre |
Percentage of car's price to be taxed |
| 2006-07 |
|
Petrol |
Diesel |
|
| Under 145 |
15 |
18 |
| 145-149 |
16 |
19 |
| 150-154 |
17 |
20 |
| 155-159 |
18 |
21 |
| 160-164 |
19 |
22 |
| 165-169 |
20 |
23 |
| 170-174 |
21 |
24 |
| 175-179 |
22 |
25 |
| 180-184 |
23 |
26 |
| 185-189 |
24 |
27 |
| 190-194 |
25 |
28 |
| 195-199 |
26 |
29 |
| 200-204 |
27 |
30 |
| 205-209 |
28 |
31 |
| 210-214 |
29 |
32 |
| 215-219 |
30 |
33 |
| 220-224 |
31 |
34 |
| 225-229 |
32 |
35 |
| 230-234 |
33 |
35 |
| 235-239 |
34 |
35 |
| 240-244 |
35 |
35 |
| 245 and over |
35 |
35 |
| |
|
|
|
For cars registered from 1 January 1998 with no C02 emissions figures, the tax charge is 15% of the list price for engines up to 1,4000cc, 25% of engines of 1,401 cc to 2000 cc and 35% for engines above 2,000 cc.
The basic car benefit charge will be the car's price multiplied by the percentage charge for the CO2 emissions band in which the car falls, subject to
- the addition of any diesel supplement, or
- discount for cars using alternative fuels and technologies.
|
|
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VAN SCALE BENEFIT |
| Vans (under 3.5 tonnes) including fuel: |
|
| Age at end of tax year |
Under 4 years |
4 years and over |
|
| 2006/07 and 2005/06 |
£500 |
£350 |
|
Top
CAR FUEL BENEFIT |
From 2003
Multiply £14,400 by the same CO2 percentage as used for the car benefit.
Minimum charge at 15% = £2,160.
Maximum charge at 35% = £5,040. |
 |
Top
FIXED PROFIT CAR SCHEME |
| Approved Inland Revenue tax-free mileage rates |
|
| From 6 April 2002 |
| |
First 10,000 business miles in the tax year |
Each mile over 10,000 miles in the tax year |
|
| Cars and vans |
40p |
25p |
| Motor cycles |
24p |
24p |
| Bicycles |
20p |
20p |
|
|
|
|
Top
PASSENGER PAYMENTS - CARS AND VANS |
5p per passenger per business mile for carrying fellow employees in a car or van on journeys which are also work journeys for them. Only payments specifically for carrying passengers count and there is no relief if you receive less or nothing at all.
|
|
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VAT |
|
From 1.4.06 |
From 1.4.05 |
|
| Standard Rate |
17.5% |
17.5% |
| Fuel and Power Rate |
5% |
8% |
| VAT on fraction of gross price |
7/47 |
7/47 |
|
| Annual Turnover Limits(based on previous 12 months) |
From 1.4.06 |
From 1.4.05 |
|
| Registration |
£61,000 |
£60,000 |
| Deregistration |
£59,000 |
£58,000 |
|
|
| Private Fuel (3 months) from 6 April 2006 |
|
| |
Petrol |
Diesel |
| |
VAT inclusive scale charge |
Liability @ 17.5% |
VAT inclusive scale charge |
Liability @ 17.5% |
|
| To 1400cc |
£273 |
£40.66 |
£260 |
£38.72 |
| 1401 to 2000cc |
£346 |
£51.53 |
£260 |
£38.72 |
| Over 2000cc |
£508 |
£75.66 |
£331 |
£49.29 |
|
| Private Fuel (3 months) from 6 April 2005 |
|
| |
Petrol |
Diesel |
| |
VAT inclusive scale charge |
Liability @ 17.5% |
VAT inclusive scale charge |
Liability @ 17.5% |
|
| To 1400cc |
£246 |
£36.64 |
£236 |
£35.15 |
| 1401 to 2000cc |
£311 |
£46.32 |
£236 |
£35.15 |
| Over 2000cc |
£457 |
£68.06 |
£300 |
£44.68 |
|
Top
NATIONAL INSURANCE CONTRIBUTIONS |
Class 1 Employed
From 6 April 2006 |
Contracted In |
Contracted Out |
|
On earnings of:
(a) on first £97.00 per week
(b) £97.01 to £645.00 per week |
nil
11% |
nil
9.4% |
| (c) Over £645 per week |
1% |
1% |
|
| Employer Earnings bracket |
|
| Up to £97.00 per week |
nil |
nil |
| £97.01 to £645 per week |
12.8% |
12.8% |
| Over £645 |
12.8% |
12.8% |
|
Class 1A: on car & fuel benefit and most other taxable benefits: 12.8%
Class 2 Self-employed: Weekly rate £2.10 once earnings over £4,465 p.a.
Class 3 Voluntary: Weekly rate £7.55 ( £392.60 per annum.)
Class 4 Self-employed: 8% on annual profits between £5,035-£33,540 and 1% above £33,540.
Top
STAMP DUTY |
Stocks and marketable securities: 0.5%
(Rounded up to the nearest multiple of £5.00) |
|
Transfers of land and buildings (consideration paid)
|
From 23.3.06 |
|
| Residential |
Non-residential |
* Rate |
| £125,000 or less |
£150,000 or less |
Nil |
| £125,001 - £250,000 |
£150,001 - £250,000 |
1% |
| £250,001 - £500,000 |
£250,001 - £500,000 |
3% |
| Over £500,000 |
Over £500,000 |
4% |
|
| * Different rate apply for residential land designated disadvantaged areas. |
| |
| LEASE DUTY |
| Rent |
|
| Residential |
Non-residential |
Rate |
| Up to £125,000 |
Up to £150,000 |
Nil |
| Over £125,000 |
Over £150,000 |
1% |
| |
| PREMIUMS |
| Duty on premiums is the same as for transfers of land (but special rates apply where rent exceeds £600 annually) |
|
