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INCOME TAX RATES 2007-2008

Taxable income	Rate
Ł	%
1 - 2,230	10
2,231 - 34,600	22*
34,601 upwards	40**

* Except dividends (10%) and savings income (20%).
** Except dividends (32.5%).
Other income taxed first, then savings income and finally dividends.

PERSONAL ALLOWANCES

	Ł
Personal allowance	5,225
-(Age 65 -74)	7,550
-(Age 75 or over)	7,690
Married couple's allowance
-(Age 65 before 6 April 2000)	6,285
-(Age 75 or over)	6,365
Blind person's allowance	1,730

If income exceeds Ł20,900 age-related allowances are reduced by 50% of the excess subject to an abatement ceiling.

The married couple's allowance, additional personal allowance and relief for maintenance payments are withdrawn from 2000-2001 and widow's bereavement allowance is withdrawn for new claimants.

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
2006/07	£1.5 million	2006/07	£215,000
2007/08	£1.6 million	2007/08	£225,000
2008/09	£1.65 million	2008/09	£235,000
2009/10	£1.75 million	2009/10	£245,000
2010/11	£1.8 million	2010/11	£255,00

To be reviewed every 5 years.

TAX CREDITS

	£
Working Tax Credit (WTC)
Basic element - max.	1,730
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.	1,845
Family element	545
Baby addition	545

Reductions in maximum rates 37% of income above £5,220*p.a.

*If only CTC is claimed, the threshold is £14,495 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 2007/08
CO₂ emissions (g/km) (round down to nearest 5g/km)	% of car’s list price taxed	Fuel benefit (£14,400 x %)
up to 140	15	2,160
145	16	2,304
150	17	2,448
155	18	2,592
160	19	2,736
165	20	2,880
170	21	3,024
175	22	3,168
180	23	3,312
185	24	3,456
190	25	3,600
195	26	3,744
200	27	3,888
205	28	4,032
210	29	4,176
215	30	4,320
220	31	4,464
225	32	4,608
230	33	4,752
235	34	4,896
240 and above	35	5,040

Company cars

For diesel cars add a 3% supplement, but maximum still 35%. 2006/07 supplement waived for Euro IV diesels.
Discounts apply to certain environmentally friendly cars.
For cars registered before 1.1.98 charge is based on engine size.
The list price includes accessories and is subject to an upper limit of £80,000.
List price is reduced for capital contributions made by the employee up to £5,000.

Fuel benefits

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
Vehicle benefit £3,000	Fuel benefit £500

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
20%

Marginal small companies rate 300,001 - 1,500,000
32.5%

Full rate over 1,500,001
30%

Small companies rate fraction
1/40

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

	Writing Down Allowance
Plant and Machinery*	25%#(reducing balance)
Motor Cars**	25% (reducing balance) - £3,000 max
Industrial and Agricultural Buildings and Hotels	4% (straight line)
For small businesses: first year allowances (FYAs) of 50% for 24months from 6.4.06 (1.4.06 for companies). For medium-sized businesses: FYAs of 40%. For all businesses: 100% FYAs on expenditure on energy saving plant and machinery. *100% FYAs on new cars with CO2 emissions not exceeding 120 gm/km until 31.3.08. #6% on certain long life assets.

CAPITAL GAINS TAX
EXEMPTIONS AND RELIEFS

	Ł
Annual exempt amount	9,200

Balance of gains (reduced by taper relief) charged as top slice of income (at savings rates - ie 10%, 20% or 40%)

BUSINESS TAPER RELIEF

Percentage relief depends on number of complete years asset owned after 5.4.98.Add one extra year if asset owned before 17.3.98.

Number of whole years in qualifying holding period	Percentage of gain chargeable %
0 - 1	50
over 2	25

NON-BUSINESS TAPER RELIEF

Percentage relief depends on number of complete years asset owned after 5.4.98.Add one extra year if asset owned before 17.3.98.

Number of whole years in qualifying holding period	Percentage of gain chargeable %
1	0
2	95
3	95
4	90
5	85
6	80
7	75
8	70
9	65
10	60

INHERITANCE TAX

	Transfers on death	Lifetime transfers
Gross cumulative transfer	Gross rate of tax
	%	%
Transfers on or after 6 April 2006
Ł1 - Ł300,000	Nil	Nil
Ł300,001 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

TAPER RELIEF
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 primary: Up to £97 per week £97.01 to £645 per week over £645 per week	NIL* Employee 11% Employer 12.8% Employee £62.70 + 1%*. Employer 12.8%*
* Entitlement to contribution-based benefits retained for earnings between £87.01 and £100 per week. On earnings above £100. * On earnings above £670.
Class 1A: rate	12.8%
Rate on other taxed benefits in kind	12.8%
Class 1B: rate	12.8%
Class 2: Main rate	Ł2.20 per week
SEE limit	Ł4,635 per annum
Class 3:	Ł7.80 per week
Class 4: Annual lower profits limit	Ł5,225
Annual upper profits limit	Ł34,840
Rate	8%
1% on profits over £34,840.

VALUE ADDED TAX

Standard rate	17.5%
Reduced rate	5%
Annual registration limit	Ł64,000
Deregistration limit	£62,000
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	£87.30
	- married couple	£139.60

Statutory pay rates - average weekly earnings £87 or over
Statutory Sick Pay		£72.55
Statutory Maternity Pay
- first six weeks	90% of weekly earnings
- next 33 weeks**		£112.75*
Statutory Paternity Pay - two weeks		£112.75*
Statutory Adoption Pay - 39 weeks**		£112.75*
* Or 90% of weekly earnings if lower ** For children due/placed from 1 April 2007.

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	- maxi ISA		7,000
	- mini ISA	- stocks, shares and life insurance	4,000
		- cash	3,000

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