Tax Rates 2010/2011
Income Tax rates
|0 – 2,440||10*|
|2,441 – 37,400||20**|
|37,401 – 150,000||40***|
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. The limit is increased to £100,000 for expenditure incurred on or after 6 April 2010 (1 April 2010 for companies). Special rules apply for accounting periods straddling these dates.
Any costs over the AIA fall into the normal capital allowance pools at either 10% or 20%. The AIA may need to be shared between certain businesses under common ownership.
Other plant and machinery allowances
The annual rate of allowance is 20%. A 10% rate applies to expenditure incurred on integral features and on long life assets.
A temporary 40% first year allowance may be due for certain expenditure exceeding the AIA incurred in the 12 month period beginning on 6 April 2009 (1 April 2009 for companies). A 100% first year allowance may still be available on certain energy efficient plant and cars.
For expenditure incurred on cars on or after 6 April 2009 (1 April 2009 for companies), costs are generally allocated to one of the two plant and machinery pools. Cars with CO2 emissions not exceeding 160gm/km receive a 20% allowance p.a. Cars with CO2 emissions over 160gm/km receive a 10% allowance p.a.
Industrial and agricultural buildings and hotels
The annual rate of allowance is 1% (2%) from 6 April 2010 (1 April 2010 for companies). Special rules apply for accounting periods straddling these dates.
Income Tax Reliefs
(For 2010/11 reduce personal allowance by £1 for every £2 of adjusted net income over £100,000.) Married couple’s allowance (relief at 10%)
|65 – 74*||9,490|
|75 and over*||9,640|
|75 and over*||6,965|
|Age allowance income limit
(Reduce age allowance by £1 for every £2 of excess income over £22,900.)
|Blind person’s allowance||1,890|
Value Added Tax
|Annual Registration Limit – from 1.4.10 (1.5.09 – 31.3.10 £68,000)||£70,000|
|Annual Deregistration Limit – from 1.4.10 (1.5.09 – 31.3.10 £66,000)||£68,000|
* 15% from 1 December 2008 to 31 December 2009
Working Tax Credit
Basic element – max.
80% of eligible costs up to £175 per week (£300 if two or more children).
Child Tax Credit (CTC)
|Child element per child – max.||2,300||2,235|
Reductions in maximum rates
39% of income above £6,420* p.a.
*If only CTC is claimed, the threshold is £16,190 (£16,040) 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.
Capital Gains Tax
|Balance of gains||18%|
|Balance of gains (reduced by taper relief* for 2007/08).||18%|
The first £2m (£1m for disposals before 6 April 2010) of qualifying gains are charged at an effective rate of 10%. Gains in excess of the limit are charged at 18%.
- Tax relief available for personal contributions: higher of £3,600 (gross) or 100% of relevant earnings.
- Employers will obtain tax relief on employer contributions if they are paid and made ‘wholly and exclusively’. Tax relief for large contributions may be spread over several years.
- Any contributions in excess of £255,000 (£245,000), whether personal or by the employer, will be subject to income tax on the individual.
- An additional income tax charge may apply on certain non-regular contributions.
|Death rate (%)||Lifetime rate (%)||Chargeable transfers 2010/11 and 2009/10 (£’000)|
|Nil||Nil||0 – 325*|
*Potentially increased for surviving spouses or civil partners who die on or after 9 October 2007.
|Annual exemption||£3,000||Marriage||– parent||£5,000|
|Small gifts||£250||– grandparent||£2,500|
Reduced charge on gifts within seven years of death
|Years before death||0-3||3-4||4-5||5-6||6-7|
|% of death charge||100||80||60||40||20|
Car and Fuel Benefits
Company cars 2010/11
|CO2emissions (gm/km) (round down to nearest 5gm/km)||% of car’s list price taxed|
|up to 130||15|
|230 and above||35|
- 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.
- A 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.
Car fuel benefit 2010/11
£18,000 x ‘appropriate percentage’ – Percentage used to calculate the taxable benefit of the car for which the fuel is provided.
- The 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 2010/11
- Van benefit £3,000
- Fuel benefit £550
- The charges do not apply to certain environmentally friendly vans or if a ‘restricted private use condition’ is met throughout the year.
Main Social Security Benefits
|Basic retirement pension||– single person||£97.65||£95.25|
|– married couple||£156.15||£152.30|
|Statutory pay rates -average weekly earnings £97 (£95) or over|
|Statutory Sick Pay||£79.15||£79.15|
|Statutory Maternity Pay||– First six weeks||90% of weekly earnings|
|– Next 33 weeks||£124.88*||£123.06*|
|Statutory Paternity Pay||– two weeks||£124.88*||£123.06*|
|Statutory Adoption Pay||– 39 weeks||£124.88*||£123.06*|
* Or 90% of weekly earnings if lower.
Mileage Allowance Payments
|Cars and vans||2010/11 and 2009/10
Rate per mile
|Up to 10,000 miles||40p|
|Over 10,000 miles||25p|
These rates represent the maximum tax free mileage allowances for employees using their own vehicles for business. Any excess is taxable. If the employee receives less than the statutory rate, tax relief can be claimed on the difference.
Class 1 (employed) contracted in
|Up to £110||Nil*||Nil*|
|£110.01 – £844||12.8%**||11%**|
|Over £844||12.8%**||£80.74 +1%***|
* Entitlement to contribution-based benefits retained for earnings between £97.01 and £110 per week.
** On earnings above £110.
*** On earnings above £844.
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 £2.40 – small earnings exception p.a. £5,075 p.a.|
Class 3 (voluntary)
|flat rate per week £12.05|
Class 4 (self-employed)
|8% on profits between £5,715 and £43,875 plus 1% on profits over £43,875|
Individual Savings Accounts (ISAs)
|Overall investment limit||10,200|
|Comprising||– cash up to||5,100 max.|
|– balance in stocks and shares||10,200 max.|
|Profits band (£)||Rate (%)|
|Small companies rate||0 – 300,000||21*|
|Marginal (small companies) rate||300,001 – 1,500,000||29.75*|
|Full rate||Over 1,500,000||28*|
|Small companies fraction||7/400*|
The profits limits are reduced for accounting periods of less than 12 months and for a company with associated companies.
*Different rates apply for ring-fenced (broadly oil industry) profit
Self-Assessment – Key Dates
31 July 2010
Second payment on account for 2009/10.
5 October 2010
Deadline for notifying HMRC of new sources of income if no tax return has been issued for 2009/10.
31 October 2010
Deadline for submission of 2009/10 non-electronic returns. Also, the deadline for submission of 2009/10 returns requiring HMRC calculation and where the taxpayer wants a balancing payment (below £2,000) collected through their 2011/12 PAYE code.
31 January 2011
Deadline for filing electronic tax returns for 2009/10.
Balancing payment due for 2009/10. First payment on account due for 2010/11.