Tax Facts

1 Relief is given by deducting 10% of the allowance from the tax liability.
2 Age-related allowances are reduced by half the amount by which income exceeds the income limit, but to no less than the basic personal allowance or the minimum married couple's allowance as appropriate.

Income Tax Rates

2006/2007 Taxable income	Band	Rate	Tax on Band	Cumulative Tax
£	£	%	£	£
0-2,150	2,150	10	215	215
2,151 - 33,300	31,150	22	6,853	7,068
Over £33,300	..	40	..	..

2005/2006 Taxable income	Band	Rate	Tax on Band	Total Tax
£	£	%	£	£
0-2,090	2,090	10	209	209
2,091 - 32,400	30,310	22	6,668	6,877
Over £32,400	..	40	..	..

For basic taxpayers, savings income excluding dividends is taxed at 20%.  Special rates apply to income tax from dividends, and tax credits are no longer repayable.  Where income exceeds the basic rates limit, the tax rate is 32.5% (applied to the dividend grossed-up by a tax credit of 1/9).

 

Corporation Tax
Financial Year Ending	31/3/200733..	31/3/20062.
Starting Rate	n/a	0%
Starting Rate Upper Limit	n/a	£10,000
Small Companies Rate	19%	19%
Small Companies Rate Upper Limit	£300,000	£300,000
Starting Rate Marginal Relief Lower Limit	n/a	£10,000
Starting Rate Marginal Relief Upper Limit	n/a	£50,000
Starting Rate Marginal Relief Fraction	n/a	11/400
Main Rate	30%	30%
Marginal Relief Lower Limit	£300,000	£300,000
Marginal Relief Upper Limit	£1,500,000	£1,500,000
Marginal Relief Fraction	19/400	19/400

 

* Companies making dividend distributions on or after 1 April 2004 and before the 1 April 2006 are liable to corporation tax at the small companies rate of 19% even if their profits fall within the starting rate threshold.

Inheritance Tax	2006/2007	Change	2005/06
Exempt Band	285,000	+£10,000	£275,000
Annual Exemption	£3,000	0	£3,000
Tax Rate	40%		40%

Taper relief is available on transfers made more than three but not more than seven years before death. Chargeable lifetime transfers are initially charged at 20% instead of 40%.

Stamp Taxes

 

	Land and Building's
Rate	Residential :Disadvantaged Areas	Residential : Other	Non-residential
Nil	£0 - £150,000	£0 - £125,000	£0 - £150,000
1%	£150,001-£250,000	£125,001-£250,000	£150,001 - £250,000
3%	£250,001-£500,000	£250,001-£500,000	£250,001-£500,000
4%	Over £500,000	Over £500,000	Over £500,000
0.5%	Shares

National Insurance Contributions	..
	2006/2007	2005/2006
Primary Threshold	£97 per week	£94 per week
Secondary Threshold	£97 per week	£94 per week
Lower Earnings Limit for Primary Class 1Contributions	£84 per week	£82 per week
Upper Earnings Limit for Primary Class 1Contributions	£645 per week	£630 per week
Employees Primary Class 1 rate on earnings between primary threshold and upper earnings limit	11%	11%
Employees Primary Class 1 rate on earnings above upper earnings limit	1%	1%
Employees SecondaryClass 1 rate on earnings above Secondary threshold	12.8%	12.8%
Self-employed Class 2 small earnings exception limit	£4,465	£4,345
Self-employed Class 2 rate	£2.10 per week	£2.10 per week
Voluntary Class 3 rate	£7.55 per week	£7.35 per week
Lower profits limit for self-employed Class 4 contributions	£5,035	£4,895
Upper profits limit for self-employed Class 4 contributions	£33,540	£32,760
Self-employed Class 4 rate on profits between lower and upper profit limits	8%	8%
Self-employed Class 4 rate on profits above upper profit limits	1%	1%

 

 

Class 1A - Employer - car, car fuel and other benefits 12.8%

Class 1B - Employer - PAYE settlement agreements 12.8%

Class 2 - Self-employed £2.05pw. Annual earnings exception limit £4,215

Class 3 - Voluntary £7.15 pw

 

Value Added Tax
		2006/07		2005/06.
Standard Rate		17.5%		17 717.5%5%..
Domestic fuel, power and energy saving measures		5%		5%..
Registration threshold : annual turnover		£61,000		£60,000
Deregistration threshold : annual turnover		£59,000		£58,000
Annual accounting Scheme
Commencement upper limit: annual turnover		£1,350,000				£660,000
Cessation upper limit: annual turnover		£1,600,000				£825,000
Cash accounting scheme
Commencement upper limit: annual turnover		£660,000			£660,000
Cessation upper limit: annual turnover		£825,000			£825,000
Capital Gains Tax
Annual exempt amounts	2006/2007		Change				2005/2006
Individuals, personal representatives for year of death and two years thereafter	£8,800		+£300					£8,500
Trustees	£4,400		+£150					£4,250