Below is a useful summary of the most important tax rates and allowances for the current tax year.
Income Tax Rates
- First £34,370 of income – 20%
- Next £115,630 – 40%
- Excess over £150,000 – 50%
Note special reduced rates apply to dividend income
Personal Allowances
- Under 65 – £8,105 (gradual withdrawal where income over £100,000)
- 65 ~ 74 – £10,500*
- 75 and over – £10,660*
*reduced by £1 for every £2 of income over £25,400 until the basic personal allowance of £8,105 is reached
National Insurance Contributions
- Employee Class 1 – 12% (on income between £7,605 and £42,475, then 2% above)
- Employer Class 1 – 13.8% (on income above £7,488pa ~ no ceiling)
- Employer Class 1A – 13.8% (on taxable benefits)
Self-employed:
- Class 4 – 9% (on profits between £7,605 and £42,475 then 2% of profits above)
- Class 2 – £2.65 per week
Corporation Tax
- Small companies rate – 20% (on taxable profits up to £300,000)
- Main rate – 24% (profits of £1.5 million and over)
- Marginal rate – 25% (profits between £300,000 and £1.5 million)
Capital Gains Tax
- Annual exemption – first £10,600 of gains
- Up to basic rate limit – 18%
- Above basic rate limit – 28%
- Entrepreneurs’ rate – 10% (up to lifetime limit of £10 million gains)
Inheritance Tax
- Nil rate band – £325,000 (per individual)
- Annual exemption – £3,000 (per donor per year)
- Small gifts limit – £250 (per donee per year)
- Business property – 100% or 50% relief
Value Added Tax
- Standard rate – 20%
- Reduced rate – 5%
- Registration limit – £77,000 annual taxable turnover
For a full listing of rates & allowances, including those for 2011/12 and earlier tax years, visit the following link to the HM Revenue & Customs website.
