Tax Information

Income Tax

Tax rates		Note	2010/11	2009/10
Basic rate band - next			£37,400	£37,400
Starting rate for savings			*10%	*10%
Basic rate			20%	20%
Dividend ordinary rate			10%	10%
Higher rate - taxable income over			£37,400	£34,800
Higher rate			40%	40%
Dividend upper rate			32.5%	32.5%
Additional rate - income over			£150,000
Additional rate			50%
Dividend additional rate			42.5%
* Starting rate is for savings income up to the starting rate limit of £2,440 within the basic rate band. The rate applies to any balance of the limit remaining after allocating taxable non-savings income.
Trusts
For interest in possession trusts on all income, and other trusts on the first £1,000 of income ("standard rate band"):
dividend ordinary rate		5	10%	10%
savings income		5	20%	20%
other income		5	20%	22%
Income of other trusts above £1,000 is taxed at the special trust rates:
rate applicable to trusts			50%	40%
dividend trust rate			42.5%	32.5%
Personal allowance (PA)	under 65	1,4	£6,475	£6,475
	65 to 74	1,2,4	£9,490	£9,490
	75 and over	1,2,4	£9,640	£9,640
	minimum		£6,475	£6,475
	Blind person's allowance		£1,890	£1,890
Married couple's allowance (MCA)
Either partner born before 6 April 1935 (relief restricted to 10%)		1,3,4	£6,965	£6,965
Tax Shelters
Enterprise Investment Scheme (EIS) up to			£500,000	£500,000
Venture Capital Trust (VCT) up to			£200,000	£200,000
Golden Handshake max.			£30,000	£30,000
Rent a Room - exempt on gross annual rent up to			£4,250	£4,250
Construction Industry Scheme deduction rate:
Standard (registered)			20%	20%
Higher (not registered)			30%	30%

Notes

Ages are as the end of the tax year. Ages for the MCA relate to the elder of spouse or civil partner
The higher rates of personal allowances are reduced by £1 for each £2 of excess income over £22,900 until the basic allowance is reached.
Similar limits apply to the married couple's allowance. The reduction in allowance is subject to a minimum level of £2,670. (For couples married before 5 December 2005, only the husband's income is taken into account. For those married on or after 5 December 2005 or in a civil partnership, only the higher earner’s income is taken into account).
For 2010/11 the personal allowance, including the minimum age-related allowance, is reduced by £1 for every £2 that net adjusted income exceeds £100,000.
Where there are several trusts created by the same settlor, the "standard rate band" is divided equally between them, subject to a minimum band of £200 for each trust.

Capital Gains Tax

Capital gains tax rates and bands are as follows:
	2010/11	2009/10
On Chargeable gains	18%	18%
Annual exemption
- individual	£10,100	£10,100
- most trustees	£5,050	£5,050

Chattels exemption
(proceeds per item or set)	£6,000	£6,000

Entrepreneurs' Relief

This reduces an individual’s chargeable gain on qualifying assets by 4/9 – an effective rate of 10%. Claims may be made on more than one occasion, up to a “lifetime” total of £2 million (£1 million to 5 April 2010).

Notes

Transfers between husband and wife or civil partners living together are generally exempt.
Capital gains of all trusts for 2010/11 are taxed at the standard rate of 18%. Where there are several trusts created by the same settlor, the annual exemption is divided equally between them, subject to a minimum exemption of £1,010 for each trust.

Corporation Tax

Corporation tax rates and bands are as follows:

Financial Year to	31 March 2010	31 March 2009
Taxable profits
First £300,000	21%	21%
Next £1,200,000	29.75%	29.75%
Over £1,500,000	28%	28%

Capital Allowances

Plant and Machinery:

Energy saving and environmentally beneficial equipment, zero and low CO2 emission (up to 110 g/km) cars, new zero emission vans, natural gas/hydrogen refuelling equipment: first year allowance (FYA) 100%
Annual investment allowance (AIA) – on first £100,000 of investment (excludes cars and other expenditure already qualifying for 100% FYA) 100%
Writing down allowance (WDA) on expenditure not qualifying for AIA:
Long-life assets, integral features of buildings, cars over 160g/km 10%
Other plant and machinery 20%
Industrial and agricultural buildings and hotels (on building cost) 1%
Enterprise Zone allowance, conversion of parts of business premises into flats, business premises renovation: max initial allowance 100%

* Transitional rules may apply

Buildings:

Industrial and agricultural buildings and hotels WDA (on building cost) 3%
Enterprise Zone allowance, conversion of parts of business premises into flats, business premises renovation: max initial allowance 100%

From	01-Dec-08	01-Jan-10
Standard rate	15%	17.50%
VAT fraction	Mar-23	Jul-47
Taxable Turnover Limits 1 May 2009
Registration - last 12 months or next 30 days over	£68,000
Deregistration - next 12 months under	£66,000
Cash accounting scheme - up to	£1,350,000
Optional flat rate scheme - up to	£150,000
Annual accounting scheme - up to	£1,350,000

VAT on fuel for private use in cars

Where businesses wish to reclaim the input VAT on fuel which has some degree of private use, they must account for output VAT on a scale charge.

The table shows the VAT chargeable for quarters commencing on or after 1 May 2009. The last two columns take account of the change of the standard rate of VAT from 15% to 17.5% with effect from 1 January 2010.

CO2 emissions	Quarterly VAT
(g/km)	Fuel scale	VAT on charge
	charge £	£ (15%)	£ (17.5%)
120 and below	126	16.43	18.76
121 - 139	189	24.65	28.14
140 - 144	201	26.21	29.93
145 - 149	214	27.91	31.87
150 - 154	226	29.47	33.65
155 - 159	239	31.17	35.59
160 - 164	251	32.73	37.38
165 - 169	264	34.43	39.31
170 - 174	276	36	41.1
175 - 179	289	37.69	43.04
180 - 184	302	39.39	44.97
185 - 189	314	40.95	46.76
190 - 194	327	42.65	48.7
195 - 199	339	44.21	50.48
200 - 204	352	45.91	52.42
205 - 209	365	47.6	54.36
210 - 214	378	49.3	56.29
215 - 219	390	50.86	58.08
220 - 224	403	52.56	60.02
225 - 229	416	54.26	61.95
230 - 234	428	55.82	63.74
235 and above	441	57.52	65.68

National Insurance Contributions

Class 1 (not contracted out)	Employer	Employee
Payable on weekly earnings of
£95 (lower earnings limit) to £110	0%	0%
£110.01 - £770 (upper accrual point)	12.80%	11%
£770.01 - £844 (upper earnings limit)	12.80%	11%
Over £844	12.80%	1%
Over state retirement age, the employee contribution is Nil

Class 1A (on relevant benefits)	12.80%	Nil

Class 1B (on PAYE settlement arrangement)	12.80%	Nil

Class 2 (Self employed)	£2.40 per week
Limit of net earnings for exception	£5,075 per annum

Class 3 (Voluntary)	£12.05 per week

Class 4 (* Self employed on profits)
£5,715 - £43,875	8%
Excess over £43,875	1%
*Exemption applies if state retirement age was reached by 6 April 2009.

Note

For those earning between £95 per week and £770 per week, employers receive a rebate of 1.4% on contracted out money purchase schemes or 3.7% on contracted out final salary schemes, and employees, a rebate of 1.6% for either scheme.