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INCOME TAX RATES 2008-2009

Taxable income	Rate
Ł	%
1 - 2,320	10*
2,321 - 34,800	20*
34,801 upwards	40**

* Only applicable to dividends and savings income.
** Except dividends (10%)
*** Except dividends (32.5%).
Other income taxed first, then savings income and finally dividends.

PERSONAL ALLOWANCES

	Ł
Personal allowance	6,035
-(Age 65 -74)	9,030
-(Age 75 or over)	9,180
Married couple's allowance
-(Age 65 before 6 April 2000)	6,535
-(Age 75 or over)	6,625
Blind person's allowance	1,800

If income exceeds Ł21,800 age-related allowances are reduced by 50% of the excess subject to an abatement ceiling.

From 2000-2001 the age-related married couple's allowances and maintenance payments relief are restricted to those couples where one partner was born before 6 April 1935.

PENSIONS SIMPLIFICATION

	Lifetime Allowance	Annual Allowance
2008/09	£1.65 million	£235,000
2009/10	£1.75 million	£245,000
2010/11	£1.8 million	£255,00

To be reviewed every 5 years.

TAX CREDITS

	£
Working Tax Credit (WTC)
Basic element - max.	1,800
Childcare element 80% of eligible costs to a max. of £175 per week (£300 if two or more children)
Child Tax Credit (CTC)
Child element per child - max.	2,085
Family element	545
Baby addition	545

Reductions in maximum rates 39% of income above £6,420*p.a.

*If only CTC is claimed, the threshold is £15,575 p.a.. The family element of CTC is not reduced unless income is more than £50,000 p.a. when it is reduced by £1 for every £15 of additional income.

CAR AND FUEL BENEFITS

Company cars 2008/09
CO₂ emissions (gm/km) (round down to nearest 5gm/km)	% of car’s list price taxed	Fuel benefit (£16,900 x %) £
up to 135	15	2,535
140	16	2,704
145	17	2,873
150	18	3,042
155	19	3,211
160	20	3,380
165	21	3,549
170	22	3,718
175	23	3,887
180	24	4,056
185	25	4,225
190	26	4,394
195	27	4,563
200	28	4,732
205	29	4,901
210	30	5,070
215	31	5,239
220	32	5,408
225	33	5,577
230	34	5,746
235 and above	35	5,915

Company cars

For diesel cars add a 3% supplement but maximum still 35%. Euro IV diesel cars registered before 1 January 2006 do not suffer the 3% supplement.
Discounts apply to certain environmentally friendly cars.
From 2008/09 a new 10% rate applies to non-electric cars with emissions of no more than 120gm/km. Environmentally friendly discounts do not apply to these cars but the diesel supplement does.
For cars registered before 1 January 1998 the charge is based on engine size.
The list price includes accessories and is subject to an upper limit of £80,000.
The list price is reduced for capital contributions made by the employee up to £5,000.

Fuel benefit

The fuel benefit charge is proportionately reduced if provision of private fuel ceases part way through the year.
The fuel benefit is reduced to nil only if the employee pays for all private fuel.

Van benefit per vehicle
2008/09 and 2007/08
Van benefit £3,000 Fuel benefit £500
The charges will not apply if a ‘restricted private use condition is met throughout the year.

H M REVENUE & CUSTOMS APPROVED MILEAGE RATE

Miles	Pence per Mile
Cars and vans
up to 10,000	40p
over 10,000	25p
Bicyles	20p
Motorcycles	24p

CORPORATION TAX

Band
Rate

Small companies rate 0 - 300,000
21%

Marginal small companies rate 300,001 - 1,500,000
29.75%

Full rate over 1,500,001
28%

Small companies rate fraction
7/400

The small companies rate is not available to 'close investment-holding companies'.

The profits limits are reduced for accounting periods of less than 12 months and for a company with associated companies.

CAPITAL ALLOWANCES

Plant and machinery - Annual Investment Allowance (AIA)
The AIA gives a 100% write-off on most types of plant and machinery costs, including integral features and long-life assets but not cars, of up to £50,000 p.a. Any costs over the AIA fall into the normal capital allowance pools at either 10% or 20%.

The AIA applies to expenditure incurred on or after 6 April 2008 (1 April 2008 for companies) by all businesses. Special rules apply for accounting periods straddling these dates. The £50,000 limit may need to be shared between certain businesses under common ownership.

Other plant and machinery allowances
The annual rate of allowance is 20% (25%) from 6 April 2008 (1 April 2008 for companies). The 20% rate also applies to cars, with an overriding maximum of £3,000 per car. Special rules apply for accounting periods straddling these dates. First year allowances are abolished except a 100% allowance may still be available on certain energy efficient plant and cars.

A new 10% rate applies to expenditure incurred on integral features and on long life assets on or after 6 April 2008 (1 April 2008 for companies). Long life asset expenditure brought forward will obtain the 10% rate (6%), with special rules applying for accounting periods straddling these dates.

Industrial and agricultural buildings and hotels
The annual rate of allowance is 3% (4%) from 6 April 2008 (1 April 2008 for companies). Special rules apply for accounting periods straddling these dates.

CAPITAL GAINS TAX
EXEMPTIONS AND RELIEFS

	Ł
Annual exempt amount	9,600

Balance of gains charged at 18%.

Entrepreneurs Relief For gains arising on or after 6 April 2008, the first £1m of qualifying gains are charged at an effective rate of 10%. Gains in excess of £1m are charged at 18%.

INHERITANCE TAX

	Transfers on death	Lifetime transfers
Gross cumulative transfer	Gross rate of tax
	%	%
Transfers on or after 6 April 2008
Ł1 - Ł312,000	Nil	Nil
Ł312,001 upwards	40	20

Estate on death taxed as top slice of cumulative transfers in the seven years before death. Most lifetime transfers (other than to discretionary trusts) are potentially exempt, only becoming chargeable where death occurs within seven years.

EXEMPTIONS	Ł
Annual	3,000
Small gift	250
Marriage :
- Parent	5,000
- Grandparent	2,500
- Bride/groom	2,500
- Other	1,000

Transfers on or within seven years of death are chargeable, but the tax is tapered as follows:

Years between gift and death	% of full charge
0 - 3	100
3 - 4	80
4 - 5	60
5 - 6	40
6 - 7	20

NATIONAL INSURANCE CONTRIBUTIONS

Class 1 (employed) contracted in
Weekly earnings	Employer	Employee
Up to £105	Nil*	Nil*
£105.01 - £770	12.8%**	11%**
Over £770	12.8%**	£73.15 +1%***
* Entitlement to contribution-based benefits retained for earnings between £90.01 and £105 per week. On earnings above £105. * On earnings above £770.

Class 1A (employers)	12.8% on employee taxable benefits
Class 1B (employers)	12.8% on PAYE Settlement Agreements
Class 2 (self-employed)	flat rate per week £2.30 small earnings exception p.a. £4,825 p.a.
Class 3 (voluntary)	flat rate per week £8.10
Class 4 (self-employed)	8% on profits between £5,435 and £40,040 plus 1% on profits over £40,040

VALUE ADDED TAX

Standard rate	17.5%
Reduced rate	5%
Annual registration limit	Ł67,000
Deregistration limit	£65,000
VAT fraction	7/47
Flat Rate Scheme - allows businesses to calculate their VAT payment as a percentage of their VAT inclusive turnover. Limits - annual VAT exclusive taxable turnover does not exceed £150,000 and total VAT exclusive annual turnover does not exceed £187,500. Leave on anniversary of scheme where total VAT inclusive annual turnover exceeds £225,000. Cash Accounting - allows businesses to account for input and output VAT on a paid and received basis. Limits from 1 April 2007 - where annual VAT exclusive taxable turnover does not exceed £1,350,000. Leave at end of a VAT period where annual VAT exclusive taxable turnover exceeds £1,600,000. Annual Accounting - allows businesses to smooth out cash flow by paying a set amount, either monthly or quarterly. Only one VAT return due a year. Limits - where annual VAT exclusive taxable turnover does not exceed £1,350,000. Leave on anniversary of scheme where annual VAT exclusive taxable turnover exceeds £1,600,000.

MAIN SOCIAL SECURITY BENEFITS

		Weekly Benefit
Basic retirement pension	- single person	£90.70
	- married couple	£145.05

Statutory pay rates - average weekly earnings £90 or over
Statutory Sick Pay		£75.40
Statutory Maternity Pay
- first six weeks	90% of weekly earnings
- next 33 weeks**		£117.18*
Statutory Paternity Pay - two weeks		£117.18*
Statutory Adoption Pay - 39 weeks**		£117.18*
* Or 90% of weekly earnings if lower ** For children due/placed from 1 April 2008.

Stamp Duty & Stamp Duty Land Tax

Land and buildings (on full consideration paid)
Rate	Residential property		Non-residential
	Disadvantaged areas	Other
	£	£	£
Nil 1% 3% 4%	0 - 150,000 150,001 - 250,000 250,001 - 500,000 Over 500,000	0 - 125,000 125,001 - 250,000 250,001 - 500,000 Over 500,000	0 - 150,000 150,001 - 250,000 250,001 - 500,000 Over 500,000

Shares and securities - rate 0.5%.

Individual Savings Accounts (ISAs)

2007/08 and 2006/07		£
Overall investment limit		7,200
Comprising	- stocks and shares	7,200
	- cash	3,600

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