Tax Rates & Allowances

 For Prior Year Rates click here

Income Tax allowances

  2012-13 2013-14
Personal Allowance £8,105 N/A
Personal Allowance for people born after 5 April 1948 N/A £9,440
Income limit for Personal Allowance £100,000 £100,000
Personal Allowance for people aged 65-74 £10,500 N/A
Personal Allowance for people born between 6 Apr 38 and 5 Apr 48 N/A £10,500
Personal Allowance for people aged 75 and over £10,600 N/A
Personal Allowance for people before 6 April 1938 N/A £10,660
Married Couple's Allowance (born before 6th April 1935 and aged 75 and over) £7,705 £7,915
Income limit for age-related allowances £25,400 N/A
Income limit for the allowances for those born before 6 Apr 48 N/A £26,100
Minimum amount of Married Couple's Allowance £2,960 £3,040
Blind Person's Allowance £2,100 £2,160

1. The Personal Allowance reduces where the income is above £100, 000 – by £1 for every £2 of income above the £100,000 limit. This reduction applies irrespective of age.
2. These allowances reduce where the income is above the income limit by £1 for every £2 of income above the limit. The Personal Allowance for people aged 65 and over (up to and including 2012-13) and born before 6 April 1948 (from 2013-14) can be reduced below the basic Personal Allowance where the income is above £100,000.
3. Tax relief for the Married Couple's Allowance is given at the rate of 10 per cent.


Income Tax rates and taxable bands

Rate 2012-13 2013-14
Starting rate for savings: 10% £0-£2,710 £0- £2,790
Basic rate: 20% £0-£34,370 £0-£32,010
Higher rate: 40% £34,371-£150,000 £32,011- £150,000
Additional rate: 50% Over £150,000 N/A
45% from 6 April 2013 N/A Over £150,000

The 10 per cent starting rate applies to savings income only. If, after deducting your Personal Allowance from your total income liable to Income Tax, your non-savings income is above this limit then the 10 per cent starting rate for savings will not apply. Non-savings income includes income from employment, profits from self-employment, pensions, income from property and taxable benefits.
The rates available for dividends are the 10 per cent ordinary rate, the 32.5 per cent dividend upper rate and the dividend additional rate of 42.5 per cent (the dividend additional rate is 37.5 per cent from 2013-14)

National Insurance contributions – rates and allowances

£ per week 2012-13 2013-14
Lower earnings limit, primary Class 1 £107 £109
Upper earnings limit, primary Class 1 £817 £797
Upper accrual point £770 £770
Primary threshold £146 £149
Secondary threshold £144 £148
Employees' primary Class 1 rate between primary threshold and upper earnings limit 12% 12%
Employees' primary Class 1 rate above upper earnings limit 2% 2%
Employees' contracted-out rebate (for contracted-out salary related schemes only) 1.4% 1.4%
Class 1A rate on employer provided benefits 13.8% 13.8%
Married women's reduced rate between primary threshold and upper earnings limit 5.85% 5.85%
Married women's rate above upper earnings limit 2% 2%
Employers' secondary Class 1 rate above secondary threshold 13.8% 13.8%
Employers' contracted-out rebate, salary-related schemes 3.4% 3.4%
Employers' contracted-out rebate, money-purchase schemes Abolished from 6 April 2012 N/A N/A
Class 2 rate £2.65 £2.70
Class 2 small earnings exception £5,595 per year £5,725 per year
Special Class 2 rate for share fishermen £3.30 £3.35
Special Class 2 rate for volunteer development workers £5.35 £5.45
Class 3 rate £13.25 £13.55
Class 4 lower profits limit £7,605 per year £7,755 per year
Class 4 upper profits limit £42,475 per year £41,450 per year
Class 4 rate between lower profits limit and upper profits limit 9% 9%
Class 4 rate above upper profits limit 2% 2%
Additional primary Class 1 percentage rate on deferred employments 2% 2%
Additional Class 4 percentage rate where deferment has been granted 2% 2%

Class 1A NICs are payable in July and are calculated on the value of taxable benefits provided in the previous tax year, using the secondary Class 1 percentage rate appropriate to that tax year.

 


Corporation Tax Rates for financial years starting on 1 April

Rate 2012 2013 2014
Small profits rate 20% 20% 20%
Small profits rate can be claimed by qualifying companies with profits at a rate not exceeding £300,000 £300,000 £300,000
Marginal Relief Lower Limit £300,000 £300,000 £300,000
Marginal Relief Upper Limit £1,500,000 £1,500,000 £1,500,000
Standard fraction 1/100 3/400  
Main rate of Corporation Tax 24% 23% 21%
Special rate for unit trusts and open-ended investment companies 20% 20% 20%

Main rate of Corporation Tax
The main rate of Corporation Tax applies when profits (including ring fence profits) are at a rate exceeding £1,500,000, or where there is no claim to another rate, or where another rate does not apply.
In addition to the rates set out in the above table, the main rate of Corporation Tax for 2015 is set at 20 per cent. The small profits rate will be unified with the main rate, so from 1 April 2015 there will be only one Corporation Tax rate for non-ring fence profits – set at 20 per cent.
 

Ring fence companies
For companies with ring fence profits (income and gains from oil extraction activities or oil rights in the UK and UK Continental Shelf) these rates differ. The small profits rate of tax on those profits is 19 per cent and the ring fence fraction is 11/400 for financial years starting 1 April 2011, 2012 and 2013. The main rate is 30 per cent for financial years starting on 1 April 2011, 2012 and 2013.
 

Corporation Tax on chargeable gains
Indexation Allowance allows for the effects of inflation when calculating the chargeable gains of companies or organisations.

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