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Capital Gains Tax
Capital gains tax rates and bands are as follows:
| Financial Year |
2010/11 |
2009/10 |
| Entrepreneurs' Relief effective rate |
10% |
10% |
| Annual Exemption |
|
|
| - Individuals, personal representatives
and trustees for disabled people |
£10,100 |
£10,100 |
| - Tax rate
|
18% |
18% |
| Transfers between husband and wife living together are exempt |
Chattels exemption (proceeds per item or set)
|
£6,000 |
£6,000 |
Corporation Tax
| Financial Year Commencing | 1 April 2009 | 1 April 2010 |
| Taxable profits | | |
| Small Companies Rates (£0 to 300,000) | 21% | 21% |
| | | |
| Small Companies Marginal relief (£300,001 to £1,500,00) | 29.75% | 29.75% |
| | |
| On profits over £1,500,000 | 28% | 28% |
Income Tax
| Tax rates |
2010/11 |
2009/10 |
| Starting rate band for income up to |
£2,440 |
£2,440 |
| Tax rate |
10% |
10% |
| Basic rate band - next |
£37,400 |
£37,400 |
| Non-savings rate |
20% |
20% |
| Savings rate |
20% |
20% |
| UK dividend income |
10% |
10% |
| Higher rate - taxable income over |
£37,400 |
£37,400 |
| Higher tax rate |
40% |
40% |
| UK dividend income between £ 37400 and £150,000 |
32.5% |
32.5% |
Income Over £150,000 | 50% | N/A |
UK dividend income over £150,000 | 42.5% | 42.5% |
| Trusts |
|
|
| Trusts within relevant property regime |
50% |
50% |
| Dividends for trusts within relevant property regime |
42.5% |
32.5% |
| Allowances that reduce taxable income |
|
|
| Personal allowance (PA) under 65 |
£6,475 |
£6,475 |
| 65 to 74 |
£9,490 |
£9,490 |
| 75 and over |
£9,640 |
£9,640 |
| Blind person's allowance |
£1,890 |
£1,890 |
| Allowances that reduce tax |
|
|
| Married couple's allowance (MCA) |
|
|
| 75 and over |
£6965 |
£6965 |
| Income limit for age-related allowances |
£22,900 |
£22,900 |
| Tax Shelters |
|
|
| Enterprise Investment Scheme @ 20% (EIS) up to |
£500,000 |
£500,000 |
| Venture Capital Trust (VCT) @30% up to |
£200,000 |
£200,000 |
| Rent a Room- exempt on gross annual rent up to |
£4,250 |
£4,250 |
Mileage Allowances
For Employees Using Their own means of Transport
The approved maximum tax and national insurance free mileage allowances for employees using their own transport for business are as follows:
| Flat Rate |
First 10,000 Miles |
Miles over 10,000 |
| Car |
40p |
25p |
| Motorcycle |
24p |
24p |
| Bicycle |
20p |
20p |
Company cars
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.
Income Tax and NICs are due when allowances exceed these rates. Employees can claim tax relief on any shortfall.
Rates of up to 5p per mile, per passenger, are also tax and NIC free when paid for the carriage of
fellow employees on the same business trip.
National Insurance Contributions
| Class 1 (not contracted out) |
Employer |
Employee |
| Lower earnings limit |
|
£110 |
| Payable on weekly earnings |
|
|
| Over £110 |
12.8% |
11% |
| Class 1A (on relevant benefits) |
12.8% |
Nil |
| Class 1B (on PAYE settlement arrangement) |
12.8% |
|
| Class 2 (Self employed) |
£2.40 per week |
|
|
| Limit of net earnings for exception |
£5,075 per annum |
|
| Class 3 (Voluntary) |
£12.05 per week |
|
| Class 4 (* Self employed on profits) |
£5,715 to £43,875 |
12% |
| Excess over |
£43,872 |
1% |
Value Added Tax
| From |
1 April 2010 |
1 April 2009 |
| Standard rate |
17.5% from 01/01/2010 |
15% |
| Taxable Turnover Limits |
|
|
| Registration - last 12 months or next 30 days over |
£70,000 |
£68,000 |
| Deregistration - next 12 months under |
£68,000 |
£66,000 |
| Cash accounting scheme - up to |
£1,350,000 |
1,350,000£- |
| Optional flat rate scheme - up to |
£150,000 |
£150,000 |
| Annual accounting scheme - up to |
£1,350,000 |
£1,350,000 |
Main Capital Allowances
For cars purchased after 6 April 2009 the annual allowances are dependent on the CO2 emissions of the car:
for cars with CO2 emissions up to 110 g/km a 100% allowance is available
for cars with CO2 emissions between 110 and 160 g/km the annual allowance is 20%
for cars with CO2 emissions over 160 g/km the annual allowance is 10%, calculated in a special pool.
| Plant and machinery |
|
| Written down Allowance |
20% |
| Long life assets / integral features / thermal insulation |
10% |
| 100% Annual Investment Allowance (AIA) on expenditure up to |
£100,000 |
| Industrial buildings and qualifying hotels |
1% of building cost p.a. |
Notes
Capital allowances allow the cost of capital assets to be written off against taxable profits. They replace the charge for depreciation in the business accounts, which is not allowable for tax relief.
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