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Income Tax
| Tax rates |
Note |
2008/09 |
2007/08 |
| Savings starting rate band to |
£2,320 |
N/A |
| Savings starting tax band rate |
10% |
N/A |
| Starting rate band to |
N/A |
£2,230 |
| Starting tax rate band |
N/A |
10% |
| Basic rate band |
4 |
£34,800 |
£32,370 |
| Basic tax rate |
20% |
22% |
| Income within basic rate band |
N/A |
20% |
| Tax on UK dividends within starting (2007/08) and basic rate bands |
10% |
10% |
| Higher rate - taxable income over |
4 |
£34,800 |
£34,600 |
| Higher tax rate |
40% |
40% |
| UK dividend rate |
32.5% |
32.5% |
| Trusts |
|
|
| Trust rate |
40% |
40% |
| Schedule F trust rate |
32.5% |
32.5% |
| Allowances that reduce taxable income |
|
|
| Personal allowance (PA) |
under 65 |
1,4 |
£6,035 |
£5,225 |
| |
65 to 74 |
1,3 |
£9,030 |
£7,550 |
| |
75 and over |
1,3 |
£9,180 |
£7,690 |
| |
Blind person's allowance |
|
£1,800 |
£1,730 |
| Allowances that reduce tax |
|
|
| Married couple's allowance (MCA) |
|
|
|
| Tax reduction |
74 |
1,2,3 |
£653.50 |
£628.50 |
| |
75 and over |
1,2,3 |
£662.50 |
£636.50 |
| The age-related allowances are progressively withdrawn if income exceeds |
£21,800 |
£20,900 |
| Minimum PA |
£6,035 |
£5,225 |
| Minimum MCA tax reduction |
£254 |
£244 |
Non domicile charge
Charge for adult non UK domiciliary - applies after UK residence in 7 or
more of the previous tax years |
£30,000 |
N/A |
| Tax Shelters |
|
|
| Enterprise Investment Scheme (EIS) up to |
£500,000 |
£400,000 |
| Maximum amount for EIS carry back |
£50,000 |
£50,000 |
| 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 rate - registered |
20% |
20% |
| Higher rate - 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.
- MCA is available only to those couples where at least one spouse or civil partner was born before 6 April 1935.
- The higher rates of personal allowances are reduced by £1 for each £2 of excess income over £21,800 until the basic allowance is reached. Similar limits apply to the married couple's allowance: the loss of tax reduction is 10p for each £2 of excess income until the minimum of £254 is reached. (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).
- Personal allowance increased by £600 on 13 May 2008
The higher rate band was reduced by £1,200.
Did you know?
That the Government expect to receive £160 billion from income tax. This represents an increase of 2.8% compared to the estimated yield of £155.6 billion in the last tax year.
2008/09 Rates and Allowances
Main taxes
Vehicles
Savings
Other taxes
Giving, credits and benefits
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