Tax Rates 2011/2012

Income Tax rates

Band(£) Rate(%)
0 – 2,440 10*
2,441 – 37,400 20**
37,401 – 150,000 40***
Over 150,000 50****

*Only applicable to dividends and savings income. The 10% rate is not available if taxable non-savings income exceeds £2,560 (£2,440).
** Except dividends (10%).
*** Except dividends (32.5%).
**** Except dividends (42.5%).
Other income taxed first, then savings income and finally dividends.

Back to top

Capital Allowances

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 £100,000 p.a. (£50,000 for expenditure incurred before 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 100% first year allowance may be available on certain energy efficient plant and cars, including expenditure incurred on new and unused zero emission goods vehicles on or after 6 April 2010 (1 April 2010 for companies).

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 nil (1%) from 6 April 2011 (1 April 2011 for companies). Special rules apply for accounting periods straddling these dates.

Back to top

Income Tax Reliefs

2011/12
£
Personal allowance – under 65 7,475
– 65 – 74* 9,940
– 75 and over* 10,090
(Reduce personal allowance by £1 for every £2 of adjusted net income over £100,000.)
Married couple’s allowance (relief at 10%)*
(Either partner 75 or over and born before 6 April 1935.)		 7,295
– min. amount 2,800
* Age allowance income limit
(Reduce age allowance by £1 for every £2 of excess income over £24,000 (£22,900).)		 24,000
Blind person’s allowance 1,980

Back to top

Value Added Tax

Standard rate 20%
Reduced rate 5%
Annual Registration Limit – from 1.4.11 (1.4.10 – 31.3.11 £70,000) £73,000
Annual Deregistration Limit – from 1.4.11 (1.4.10 – 31.3.11 £68,000) £71,000

Tax Credits

2011/12
£
Working Tax Credit
Basic element – max. 1,920
Childcare element
70% (80%) of eligible costs up to £175 per week (£300 if two or more children).
Child Tax Credit (CTC)
Child element per child – max. 2,555
Family element 545
Baby addition –

Back to top

Capital Gains Tax

2011/12
Individuals £
Exemption 10,600
Standard rate 18%
Higher rate* 28%
Trusts
Exemption 5,300
Rate 28%
*For higher and additional rate taxpayers
Entrepreneurs’ Relief
For disposals on or after 6 April 2011 the first £10m (£5m for disposals on or after 23 June 2010 and before 6 April 2011) of qualifying gains are charged at 10%. Gains in excess of the limit are charged at the rates detailed above.

Back to top

Pension Premiums

2011/12

  • Tax relief available for personal contributions: higher of £3,600 (gross) or 100% of relevant earnings.
  • Any contributions in excess of £50,000 (£255,000), whether personal or by the employer, may be subject to income tax on the individual.
  • Where the £50,000 limit is not fully used it may be possible to carry the unused amount forward for three years.
  • 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.

Back to top

Inheritance Tax

Death
rate
%		 Lifetime
rate
%		 Chargeable transfers
2011/12 and 2010/11
£’000
Nil Nil 0 – 325*
40 20 Over 325*

*Potentially increased for surviving spouses or civil partners who die on or after 9 October 2007.

Reliefs
Annual exemption £3,000 Marriage – parent £5,000
Small gifts £250 – grandparent £2,500
– bride/groom £2,500
– other £1,000
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

Back to top

Car and Fuel Benefits

Company cars 2011/12

Company cars 2011/12
CO2 emissions (gm/km) (round down to nearest 5gm/km) % of car’s list price taxed
up to 125 15
130 16
135 17
140 18
145 19
150 20
155 21
160 22
165 23
170 24
175 25
180 26
185 27
190 28
195 29
200 30
205 31
210 32
215 33
220 34
225 and above 35

Company cars

  • For diesel cars add a 3% supplement but maximum still 35%.
  • A 0% rate applies to cars which cannot emit CO2 when driven.
  • A 5% rate applies to non-electric cars with emissions which do not exceed 75gm/km.
  • A 10% rate applies to non-electric cars with emissions which do not exceed 120gm/km.
  • The diesel supplement can apply to 75 and 120gm/km cars.
  • For cars registered before 1 January 1998 the charge is based on engine size.
  • The list price includes accessories and is not subject to an upper limit.
  • The list price is reduced for capital contributions made by the employee up to £5,000.

Car fuel benefit 2011/12

£18,800 x ‘appropriate percentage’*
*Percentage used to calculate the taxable benefit of the car for which the fuel is provided.

  • The charge does not apply to certain environmentally friendly cars.
  • 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 2011/12

Van benefit £3,000
Fuel benefit £550

  • The charges do not apply to vans which cannot emit CO2 when driven or if a ‘restricted private use condition’ is met throughout the year.

Back to top

Main Social Security Benefits

Weekly benefit

2011/12
Basic retirement pension – single person £102.15
– married couple £163.35
Statutory pay rates – average weekly earnings £102 (£97) or over
Statutory Sick Pay £81.60
Statutory Maternity Pay
– First six weeks 90% of weekly earnings
– Next 33 weeks £128.73*
Statutory Paternity Pay – two weeks £128.73*
Statutory Adoption Pay – 39 weeks £128.73*
* Or 90% of weekly earnings if lower.

Additional Paternity Pay and Leave may be available for a child due or adoptions matched on or after 3 April 2011.

Mileage Allowance Payments

Cars and vans

2011/12
Rate per mile
Up to 10,000 miles 45p
Over 10,000 miles 25p
Bicycles 20p
Motorcycles 24p

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.

National Insurance

Class 1 (employed) contracted in

2011/12 Class 1 (employed) contracted in rates
Employee Employer
Earnings per week % Earnings per week %
Up to £139 Nil* Up to £136 Nil
£139.01 – £817 12 Over £136 13.8
Over £817 2
* Entitlement to contribution-based benefits retained for earnings between £102 and £139 per week.
Class 1A (employers) 13.8% on employee taxable benefits
Class 1B (employers) 13.8% on PAYE Settlement Agreements
Class 2 (self-employed) flat rate per week £2.50
small earnings exception p.a. £5.315 p.a.
Class 3 (voluntary) flat rate per week £12.60
Class 4 (self-employed) 9% on profits between £7,225 and £42,475 plus 2% on profits over £42,475

Back to top

Individual Savings Accounts (ISAs)

2011/12
£
Overall annual investment limit 10,680
Comprising – cash up to 5,340 max.
– balance in stocks and shares 10,680 max.

Back to top

Corporation Tax

Years to 31.3.12

Years to 31.3.11
Profits band
£		 Rate
%		 Profits band
£		 Rate
%
Small profits rate 0 – 300,000 20* 0 – 300,000 21*
Marginal (small profits) rate 300,001 – 1,500,000 27.5* 300,001 – 1,500,000 29.75*
Main rate Over 1,500,000 26* Over 1,500,000 28*
Standard fraction 3/200* 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.

Back to top