Rates and Allowances

Rates and Allowances

The rates and allowances set by HMRC for various types of tax are summarised below.

Income Tax Allowances

Income Tax Allowances 2011-12 (£) 2010-11 (£)
Personal allowance (1) 7,475 6,475
Income limit for personal allowance (1) 100,000 100,000
Personal allowance for people aged 65-74 (1)(2) 9,940 9,490
Personal allowance for people aged 75 and over (1)(2) 10,090 9,640
Married couple's allowance - aged 75 or over (2)(3) 7,295 6,965
Income limit for age-related allowances 24,000 22,900
Minimum married couple's allowance 2,800 2,670
Blind person's allowance 1,980 1,890

(1) From 6 April 2010 the personal allowance is reduced by £1 for every £2 by which income exceeds the income limit £100,000.
(2) These allowances reduce by £1 for every £2 of income above the income limit for age related allowances but will never be less than the basic personal allowance or minimum amount of married couple's allowance.
(3) Available to people born before 6 April 1935. Tax relief for the married couple's allowance is given at the rate of 10%.

Taxable Bands

Taxable Bands Allowances 2011-12 (£) 2010-11 (£)
Starting rate for savingd 10% (1) 0 - 2,560 0 - 2,440
Basic rate 20% (2) 2,561 - 35,000 2,441 - 37,400
Higher rate 40% (3) 35,001 - 150,000 37,401 - 150,000
Additional rate 50% (4) over 150,000 over 150,000

(1) If your non-savings income is above the starting rate of limit of £2,560 (2010-11 £2,440) the 10% starting rate for savings will not apply.
(2) Dividends are only subject to 10% tax up to the basic rate limit of £35,000 (2010-11 £37,400). This tax is satisfied by the dividend tax credit so no further tax is payable on dividends received.
(3) Where taxable income is subject to the higher rate of tax, dividends are instead subject to 32.5% (Equivalent to 25% of the net amount received).
(4) Where taxable income is subject to the additional rate of tax, dividends are instead subject to 42.5% (Equivalent to 36.11% of the net amount received).

National Insurance Contributions

£ per week 2011-12 2010-11
Lower earnings limit, primary Class 1 £102 £97
Upper earnings limit, primary Class 1 £817 £844
Upper accruals point £770 £770
Primary weekly earnings threshold £139 £110
Secondary weekly earnings threshold £136 £110
Employee's primary Class 1 rate between primary threshold and upper earnings limit 12% 11%
Employee's primary Class 1 rate above upper earnings limit 2% 1%
Employee's contracted-out rebate etween primary earnings threshold and upper earnings limit 1.6% 1.6%
Married women's reduced rate between primary threshold and upper earnings limit 5.85% 4.85%
Married women's rate above upper earnings limit 2% 1%
Employer's secondary Class 1 rate above secondary earnings threshold 13.8% 12.8%
Employer's contracted-out rebate, final salary-related schemes 3.7% 3.7%
Employer's contracted-out rebate, money-purchase schemes 1.4% 1.4%
Class 2 weekly rate £2.50 £2.40
Class 2 small earnings exception £5,315 pa £5,075 pa
Special Class 2 rate for share fishermen £3.15 £3.05
Special Class 2 rate for volunteer development workers £5.10 £4.85
Class 3 voluntary weekly rate £12.60 £12.05
Class 4 lower profits limit £7,225 pa £5,715 pa
Class 4 upper profits limit £42,475 pa £43,875 pa
Class 4 rate between lower profits limit and upper profits limit 9% 8%
Class 4 rate above upper profits limit 2% 1%

Capital Gains Tax for Individuals and Trustees

Annual exempt amount 2011-12 (£) 2010-11 (£)
Individuals 10,600 10,100
Trustees 5,300 5,050

Rates 2011-12 2010-11
Individuals and personal representatives (1) 28% 28%
Companies CT rates apply CT rates apply
Limit for gains subject to entrepreneurs' relief (2) £10m £5m
Entrepreneur's rate 10% 10%

(1) With effect from 23 June 2010 the capital gains tax rate increased to 28% for higher rate taxpayers. The rate for standard rate taxpayers remains at 18%.
(2) Disposals of whole or part of a business are subject instead to an entrepreneur's rate of 10%. With effect from 23 June 2010 the limit for gains subject to entrepreneur's relief increased from £2,000,000 to £5,000,000. The limit increases to £10,000,000 from 6 April 2011.

Inheritance Tax

Inheritance Tax Rates 2011-12 (£) 2010-11 (£)
Nil rate band for individuals (1) £325,000 £325,000
Thereafter, lifetime gifts (2) 20% 20%
Thereafter, on death gifts (3) 40% 40%

(1) Unused nil rate band can be used by surviving spouse or civil partner
(2) Increased to 40% subject to tapering relief, on gifts made between 3 and 7 years pre death.
(3) From April 2012, a reduced rate of inheritance of 36% will be introduced where 10% or more of the net estate is left to charity.

Corporation Tax

Corporation Tax FY 2011 FY 2010
On profits £0 - £300k 20% 21%
On profits £300k - £1.5m 27.5% 29.5%
On profits above £1.5m 26% 28%

VAT

VAT Rates
Standard rate (from 1 January 2011) 20%
Registration level from (from 1 April 2011) £73,000 turnover per annum
Deregistration level from (from 1 April 2011) £71,000 turnover per annum

Working Tax Credit - £ per year (unless stated)

Rates and Thresholds Apr 2011 Apr 2010
Basic element £1,920 £1,920
Couple and lone parent element £1,950 £1,890
30 hour element £790 £790
Disabled worker element £2,650 £2,575
Severe disablity element £1,130 £1,095
50+ Return to work payment (16-29 hours) £1,365 £1,320
50+ Return to work payment (30+ hours) £2,030 £1,965

Childcare element of the Working Tax Credit - £ per year (unless stated)

Rates and Thresholds April 2011 April 2010
Maximum eligible cost for one child £175 per week £175 per week
Maximum eligible cost for two or more children £300 per week £300 per week
Percentage of eligible costs covered 70% 70%

Child Tax Credit - £ per year (unless stated)

Rates and Thresholds April 2011 April 2010
Child Tax Credit Family element £545 £545
Family element, baby addition withdrawn £545
Child element £2,555 £2,300
Disabled child element £2,800 £2,715
Severely disabled child element £1,130 £1,095

Income thresholds and withdrawal rates - £ per year (unless stated)

Rates and Thresholds April 2011 April 2010
First income threshold £6,420 £6,420
First withdrawal rate (per cent) 41% 39%
Second income threshold £40,000 £50,000
Second withdrawal rate (per cent) 417% 6.67%
First threshold for those entitled to Child Tax Credit only £15,860 £16,190
Income disregard £10,000 £25,000

Child Benefit - £ per week

Rates April 2011 April 2010
Eldest/Only Child £20.30 £20.30
Other Children £13.40 £13.40

Guardian Allowance - £ per week

Rates April 2011 April 2010
Guardian's Allowance £14.75 £14.30