UK TAX RATES:
understanding your income
Here you can find up-to-date tax rates and information directly from the Inland Revenue offices:
1. Income tax rates and Allowances
2. National Insurance contributions
3. Tax Credits
4. ISAs
5. Value Added Tax
6. Individual Pension Contribution Limits
7. Corporation Tax Rates
8. Capital Gains Tax
9. Business Use Car Benefits
10. Inheritance Tax
11. Stamp Duty and Stamp Duty Land Tax
Income Tax allowances |
2010-11 |
2011-12 |
2012-13 |
|---|---|---|---|
Personal Allowance (1) |
£6,475 |
£7,475 |
£8,105 |
Income limit for Personal Allowance |
£100,000 |
£100,000 |
£100,000 |
Personal Allowance for people aged 65-74 (1)(2) |
£9,490 |
£9,940 |
£10,500 |
Personal Allowance for people aged 75 and over (1)(2) |
£9,640 |
£10,090 |
£10,660 |
Married Couple's Allowance (born before 6th April 1935 but aged under 75)(2)(3)(4) |
N/A |
N/A |
N/A |
Married Couple’s Allowance (born before 6th April 1935 and aged 75 and over) (2) (3) |
£6,965 |
£7,295 |
£7,705 |
Income limit for age-related allowances |
£22,900 |
£24,000 |
£25,400 |
Minimum amount of Married Couple's Allowance |
£2,670 |
£2,800 |
£2,960 |
Blind Person's Allowance |
£1,890 |
£1,980 |
£2,100 |
- From the 2010-11 tax year the Personal Allowance reduces where the income is above £100, 000 - by £1 for every £2 of income above the £100,000 limit. This reduction applies irrespective of age.
- These allowances reduce where the income is above the income limit for age-related allowances by £1 for every £2 of income above the limit. For the 2009-10 they will never be less than the basic Personal Allowance or minimum amount of Married Couple's Allowance. However, from the 2010-11 tax year the Personal Allowance for people aged 65 to 74 and 75 and over can be reduced below the basic Personal Allowance where the income is above £100,000.
- Tax relief for the Married Couple's Allowance is given at the rate of 10 per cent.
- In the 2009-10 tax year all Married Couple's Allowance claimants in this category became 75 at some point during the year and therefore entitled to the higher amount of the allowance - for those aged 75 and over.
Rate |
2010-11 |
2011-12 |
2012-13 |
|---|---|---|---|
Starting rate for savings: 10%* |
£0-£2,440 |
£0- £2,560 |
£0- £2,710 |
Basic rate: 20% |
£0-£37,400 |
£0- £35,000 |
£0- £34,370 |
Higher rate: 40% |
£37,401-£150,000 |
£35,001-£150,000 |
£34,371-£150,000 |
Additional rate: 50% |
Over £150,000 |
Over £150,000 |
Over £150,000 |
* From 2008-09 there is a 10 per cent starting rate for savings income only. If your non-savings income is above this limit then the 10 per cent starting rate for savings will not apply.
The rates available for dividends for the 2009-10 tax year are the 10 per cent ordinary rate and the 32.5 per cent dividend upper rate. From the 2010-11 tax year, as well as these rates there is a new dividend additional rate of 42.5 per cent.
Class 1 (employers and employees) (figure for 2011/12 year)
| Contracted-in | Contracted out |
| Employees: those who earn £110 (£139) or more per week pay 0% on £110 (£139) and 11%(12%) on the remainder up to £884 (£817) per week and an additional 1% (2%) above £844 (£817) per week. Employers: contributions are paid at 12.8%(13.8%) on so much of an employees earningss as exceed £110 (£136) per week. |
Employees: the rate is 9.4% (10.4%). A rebate of 1.6% is also given on earnings between £97 (£102) and £110 (£139). Employers: rates are reduced by 3.7% for salary related schemes and 1.4% (1.6%) for money purchase schemes on the art of earnings between £110 (£136) and £770 per week. Contributions are paid at a rate of 12.8% (13.8%) on the excess over £770. Rebate at 3.7% and 1.4% (1.6%) is also given on earnings between £97 (£102) and £110(£139). |
Other Classes:
| Class 1A (employers only): 12.8% based on the amounts of taxable benefits. Class 1B (employers only): 12.8% in respect of amounts in PAYE settlement agreements and income tax thereon. Class 2 (flat rate for self-employed): £2.40 per week. Class 3 (voluntary): £12.05 per week. Class 4 (self employed): 8% of annual profits between £5,715 and £43,875 and an addtional 1% on profits above this. |
Working tax credit is for those on low incomes typically up to £13,369 (£13,253 in 2009/2010) , more for those with children. Child Tax Credit is paid directly to the main carer if relevant household income is less than £58,175 or £66,350 if there is a child under 1 year.
From 6 April 2009, you could subscribe up to £3,600 per tax year to a cash ISA and up to £7,200 per tax year into a stocks and shares ISA, subject to an overall annual subscription limit of £7,200 to both ISAs.
From 6 October 2009 for individuals aged 50 or over the ISA limit was raised to £10,200 of which £5,100 can be invested in cash.
From 6 April 2010 the new ISA limit for all individuls will be raised to £10,200 of which £5,100 can be invested in cash. From 6 April 2011 the ISA limits will be increased in line with inflation.
Registration threshold increased to £70,000 from £68,000 with effect from 1 April 2010.
VAT rate |
From |
To |
20% |
04/01/11 |
- |
17.5% |
01/01/10 |
03/01/11 |
15% |
01/12/08 |
31/12/09 |
| Annual Allowance | |
| £245,000 - 09/10 £255,000 - 10/11 to 15/16 |
The maximum amount of contribution that will attract tax relief is 100% of relevant UK earnings chargeable to income tax for the year, or £3,600 if greater, up to the allowance. |
| Lifetime Allowance | |
£1.75m - 09/10 |
These allowances can be exceeded by an individual, however there will be tax consequences in respect of excessive benefits. |
There will be a restriction of pensions tax relief from 6 April 2011 for individuals with gross incomes of £150,00 and over (where gross income incorporates all pension contributions, including benefits provided by an employer). A taper will apply for those on incomes between £150,000 and £180,000 gradually reducing tax relief on pension contributions until it is restricted to the basic rate. Individuals with pre-tax incomes (excluding employer pension contributions) of less than £130,00 will be unaffected.
A special annual allowance applies for 2009/10 and 2010/11 for individuals with income of £130,000 or over. Tax relief above basic rate is recovered from pension savings above an individual's special annual allowance by the application of the special annual allowance charge. An individual's special annual allowance is the higher of their regular pension savings and £20,000 (or in certain circumstances, where contributions have been less regular than quarterly, £30,000).
Rate |
2008 |
2009 |
2010 |
2011 |
|---|---|---|---|---|
Small Profits Rate |
21%* |
21%* |
21%* |
20% |
Small Profits Rate can be claimed by qualifying companies with profits at a rate not exceeding |
£300,000 |
£300,000 |
£300,000 |
|
Marginal Relief Lower Limit |
£300,000 |
£300,000 |
£300,000 |
|
Marginal Relief Upper Limit |
£1,500,000 |
£1,500,000 |
£1,500,000 |
|
Standard fraction |
7/400 |
7/400 |
7/400 |
|
Main rate of Corporation Tax |
28%* |
28%* |
28%* |
27%* |
Special rate for unit trusts and open-ended investment companies |
20% |
20% |
20% |
The annual tax-free allowance (known as the Annual Exempt Amount) allows you to make a certain amount of gains each year before you have to pay tax.
Nearly everyone who is liable to Capital Gains Tax gets this tax-free allowance.
There's one Annual Exempt Amount for:
- most individuals who live in the UK
- executors or personal representatives of a deceased person’s estate
- trustees for disabled people
Most other trustees get a lower Annual Exempt Amount.
Customer group |
2008-09 |
2009-10 |
2010-11 |
|---|---|---|---|
Individuals, personal representatives and trustees for disabled people |
£9,600 |
£10,100 |
£10,100 |
Other trustees |
£4,800 |
£5,050 |
£5,050 |
Company Cars - Annual Benefits
| CO2 emissions in g/km | % of list price |
| 0 | 0 |
| 75 or less | 5 |
| 80 - 120 | 10 |
| 125 - 130 | 15 |
| 135 - 225 | |
| 235 and over | 35 |
Own cars for business use
First 10,000 miles in a tax year |
On each mile over 10,000 in a tax year |
|
| Authorised rate per mile (all engine sizes) |
40p |
25p |
Aggregate chargable value: up to £325,000 - 0%; over the £325,000 - 40%. Thus, the expected increase of the nil rate band to £350,000 from 6 April 2011 has been abandoned, with the nil rate band of £325,000 now being frozen until 2014/15.
Reduced charge on lifetime gifts within seven years of death:
Years between gift and death |
0-3 |
3-4 |
4-5 |
5-6 |
6-7 |
%of death rates |
100% |
80% |
60% |
40% |
20% |
| Stamp Duty: | Lease Duty: | |
| Stocks and shares Stamp duty reserve tax |
0.5% 0.5% |
This is charged at 1% of the excess net present value (npv) of the total rent payable under a property lease where the nvp exceeds £150,000 (non-residential or residential in disadvantaged areas) or £125,000 (residential outside disadvantaged areas) |
Stamp Duty Land Tax
Disadvantaged area |
Non-Disadvantaged area |
All Areas |
|
| £0 - £125,000 £125,001 - £150,000 £150,001 - £250,000 £250,001 - £500,000 £500,001 - £1,000,000 £1,000,001 or more |
0% |
0% 1% 1% 3% 4% 5% |
0% 0% 1% 3% 4% 4% |
Relief from Stamp Duty Land Tax for First Time Buyers
From 25 March 2010, residential property up to the value of £250,000 is exempt from Stamp Duty Land Tax until 24 March 2012. From 25 March 2012, the 0% and 1% rates apply as per the table above.
