Tax Rates 2009/2010
Main Income Tax Reliefs
  2010/11 2009/10
Allowed at top rate of tax
Personal Allowance £6,475 £6,475
Personal Allowance (65-74) * £9,490 £9,490
Personal Allowance (75 and over) * £9,640 £9,640
Blind Person's Allowance £1,890 £1,890
Personal allowances in 2010/11 are withdrawn at £1 for every £2 by which total income exceeds £100,000.
Allowed only at 10%
Married Couple's Allowance * £6,965 £6,965
(Only available if born before 6th April 1935)
Income limit for age-related allowances £22,900 £22,900
* Age allowances are reduced £1 for every £2 by which income exceeds the income limit, until the age allowance is reduced to the normal allowance. Personal allowance is reduced before married couple's allowance. MCA is reduced to a minimum of £2,670 (2009/10: £2,670).
Income Tax Rates and Bands
  2010/11 2009/10
Starting rate band * (see note) £2,440 £2,440
Basic rate band £37,400 £37,400
Higher rate band £37,401 - £150,000 Over £37,400
Additional rate Over £150,000 -
Starting rate band is withing basic rate band & applies to savings income only; if taxable general income exceeds the band, the 10% rate is not available.
 
Tax rates Rates differ for General/Savings/Dividends
 
1010/11 2009/10
G S D G S D
N/A 10% 10% N/A 10% 10%
20% 20% 10% 20% 20% 10%
40% 40% 32.5% 40% 40% 32.5%
40% 40% 32.5% - - -
 
Starting rate
Basic rate
Higher rate
Additional rate
General income (salary, pension, profit, rent) uses lower rate bands first, then savings (interest), then dividends. Discretionary trusts: basic rate as above applies to first £1,000 of income, then higher rate.
Car Benefit Assessment 2010/11
Charge based on a percentage of the initial list price of the car, including accessories, delivery charges and VAT. The percentage depends on the carbon dioxide emmisions rating of the car, and whether the engine runs on petrol or diesel. For 2010/11, the taxable benefit on an electric car (no emmissions) is nil.
Ratings Petrol Diesel
0-75g/km 5% 8%
76-120g/km 10% 13%
121-130g/km 15% 18%
Over 130g/km +1% for each extra 5g/km (135, 140 etc)
Maximum 35% 35%
Special rules apply to older cars which do not have a CO2 rating. Employee contributions for private use are deducted from the taxable figure. Company vans are charged at £3,000 if private use is more than home-to-work travel. An additional amount of £500 is charged if fuel is provided free for private use. There is no taxable benefit on an electric van.
Car Fuel Benefit
The benefit of free fuel for private use in a company car is calculated using the same percentage as that used for the car benefit, applied to a standard figure of £18,0 (2009/10: £16,900). The taxable amount will therefore be between £900 (min) and £6,300 (max).
Tax Free Mileage Allowances
  Higher Rate Lower Rate
  2010/11 & 2009/10
All cars 40p 25p
Motorcycles 24p 24p
Bicycles 20p 20p
Business passengers 5p 5p
Higher rate allowed up to 10,000 business miles.
Fuel-Only Allowances for Company Cars
  Petrol Diesel LPG
Up to 1,400cc 11p 11p 7p
1,400cc - 2,000cc 14p 11p 8p
Over 2,000cc 20p 14p 12p
  These figures may change more often than once a year
National Insurance Contributions
Class 1 (Employees)  
  Contracted In Contracted Out
  Salary Related Money Purchase
Employee contributions
on earnings between £110.01 and £770 p/w		 11.0% 9.4% 9.4%
Employee contributions
on earnings between £770 and £844 p/w		 11.0% 11% 11%
on earnings above £844 p/w 1.0% 1.0% 1.0%
Employer contributions
on earnings between £110.01 and £770 p/w		 12.8% 9.1% 11.4%
on earnings above £770 p/w 12.8% 12.8% 12.8%
Employer contributions (at 12.8%) are due on most benefits in kind and on tax paid on an employee's behalf under a PAYE settlement agreement.
Class 2 (Self-employed)  
Flate rate per week £2.40
Small earnings exception: profits per annum £5,075
Class 3 (Voluntary)  
Flate rate per week £12.05
Class 4 (Self-employed)  
On profits £5,715 - £43,875 8.0%
On profits over £43,875 1.0%
Pension Contributions
Maximum annual tax-efficient gross contributions to age 75
- individuals - £3,600 or 100% of earnings to £255,000
- employers - £255,000 less employee contributions
Maximum tax efficient fund on taking benefits in 2010/11: £1.8m (Staying the same until 2015/16).
Only current earnings count for the 100% limit. Most personal pension contributions are paid net of basic rate tax.
Extra contributions over £20,000 by those with income over £130,000 may suffer a clawback of relief.
Inheritance Tax
Charges on or after 6th April 2009 Rates %  
0 - £325,000 Nil Nil band frozen until 2014/15
Above £325,000 40%
Lifetime chargeable transfers at half the death rate, i.e. 20%.
Business property relief of 100% for all shareholdings in qualifying unquoted trading companies and for most unincorporated trading businesses; agricultural property relief at 100% for qualifying holdings of agricultural land.
Annual excemption for lifetime gifts £3,000.
Small gifts - annual amount per donee £250.

Tapering relief applies to reduce the tax on transfers within 7 years of death. The reduction in tax is 20% for survivorship of 3-4 years, 40% for 4-5 years, 60% for 5-6 years and 80% for 6-7 years.
Important annual limits 2010/11 2009/10
Individual Savings Account investment £10,200 **£7,200
Enterprise Investment Scheme investment *£500,000 *£500,000
Venture Capital Trust investment †£200,000 †£200,000
* Relief at 20% † Relief at 30%
** From 6.10.09, £10,200 for those aged 50+.
Value Added Tax
Standard rate (7/47 of VAT-inclusive price) 17.5%
Registration level from 01/04/10 £70,000 per annum
Deregistration level from 01/04/10 £68,000 per annum
Standard rate rises to 17.5% on 1.1.10.
Scale charges
The scale charges for private use of business fuel are based on the CO2 emissions rating of the car. A different charge will apply for each 5g/km increase between 130g/km (min) and 230g/km (max) . For a 3 month period:
120 and less £120.00 net £21.00 VAT
121 to 134 £180.43 net £31.57 VAT
rising by per 5g/km approx * £12.06 net £2.11 VAT
230 or above £422.13 net £73.87 VAT
* exact figures must be obtained from the full table.
Capital Gains Tax
Annual exempt amount 2010/11: individuals £10,100, most trustees £5,050 (unchanged from 2009/10).
. Net gains after all reliefs, losses and annual exempt amount ar taxed at 18%.
Entrepreneurs' relief
For disposals of sole trade or interest in a partnership trade, or shares in a trading company by an employee owning at least 5%. the gain (up to £2m lifetime allowance - £1m before 6.4.10) is reduced to 5/9, to give an effective rate of CGT of 10%. Gains above the allowance are taxed at 18%.
Corporation Tax
  Year to 31/03/2011 and 31/03/2010
Main rate 28%
Profits above £1.5m
Small companies rate 21%
Profits up to £300K
Small/Large Marginal Band £300K - £1.5m
Fraction (effective rate) 7/400 (29.75%)
Main Capital Allowances
Allowance %
Plant and Machinery
annual investment allowance: £100,000 * 100
certain energy efficient plant, including low emission cars 100
certain energy efficient plant, including low emission cars 100
writing down allowance: general pool 20
writing down allowance: special rate pool 10
* £50,000 to 31.3.10 (companies) or 5.4.10 (income tax traders).
The old system of cheap/expensive cars has been abolished, but transitional rules cover existing expenditure.
the old system of cheap/expensive cars has been abolished, but transitional rules cover existing expenditure before April 2009.
Industrial building allowances are being phased out: 4% in 2007/08; 3% in 2008/09; 2% in 2009/10; 1% in 2010/11; nil thereafter.
Stamp Duty and Stamp Duty Land Tax
Shares and marketable securities (nil if value up to £1,000)) 0.5%
Land -
0 - Threshold Nil
Threshold - £250,000 1%
£250,001 - £500,000 3%
£500,001 and over 4%
The threshold is:
£125,000 general residential property
£150,000 residential in "disadvantaged areas"
£150,000 commercial property
For the two years to 24.3.2012, first time buyers can claim relief from SDLT on purchases of up to £250,000 for property they intend to live in.
Earliest Due Dates for Payment of Tax
Income Tax
Employment Most tax paid under PAYE
Interest, dividends Lower/basic rate liability usually settled before receipt.
Untaxed sources, plus balance on employment and higher rates on investment income (self-assessment). Payments on account for 2010/11 on 31/01/11 and 31/07/11 based on 2009/2010 tax; balance due 31/01/2012 with first installment for 2011/12.
Capital Gains Tax 31st January following the end of the tax year.
Inheritance Tax Normally 6 months after month of death.
Corporation Tax Large companies pay by installments starting 6 1/2 months through the accounting period; small/medium companies, 9 months and 1 day after end of period.
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