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Tax Rates & Allowances: 2007-8
Posted Mar 27, 2007
Income tax, capital gains tax, and inheritance tax
| £ per year (unless stated) | 2006-07 | Change | 2007-08 | ||
| Income tax personal and age-related allowances | |||||
| Personal allowance (age under 65) | £5,035 | +£190 | £5,225 | ||
| Married couple's allowance* - minimum amount | £2,350 | +£90 | £2,440 | ||
| Capital gains tax annual exempt amount | |||||
| Individuals etc. | £8,800 | +£400 | £9,200 | ||
| Most trustees | £4,400 | +£200 | £4,600 | ||
| Inheritance tax threshold | £285,000 | +£15,000 | £300,000 | ||
| Pension schemes allowances | |||||
| Annual Allowance | £215,000 | +£10,000 | £225,000 | ||
| Lifetime Allowance | £1,500,000 | +£100,000 | £1,600,000 | ||
*Married couple's allowance is given at the rate of 10 per cent.
Income tax: taxable bands| £ per year | 2006-07 | 2007-08 |
| Starting rate: 10%* | £0-£2,150 | £0-£2,230 |
| Basic rate: 22%* | £2,151-£33,300 | £2,231-£34,600 |
| Higher rate: 40%* | Over £33,300 | Over £34,600 |
* The rate of tax applicable to savings income in Section 1A ICTA 1988 remains at 20 per cent for income between the starting and basic rate limits. The rates applicable to dividends are 10 per cent for income up to the basic rate limit and 32.5 per cent above that. For future changes to the availability of the non-payable dividend tax credit please see below.
Corporation tax on profits| £ per year (unless stated) | 2006-07 | 2007-08 |
| £0-£300,000 | 19% | 20% * |
| £300,001 - £1,500,000 | Marginal relief | Marginal relief |
| £1,500,001 or more | 30% | 30% |
* It is worth noting that the Small Firms Tax Rate not only rises from 19% to 20% in April 2007, but then 21% in April 2008 and 22% in April 2009!
National insurance contributions
| £ per week (unless stated) | 2006-07 | Change | 2007-08 |
| Lower earnings limit, primary Class 1 | £84 | +£3 | £87 |
| Upper earnings limit, primary Class 1 | £645 | +£25 | £670 |
| Primary threshold | £97 | +£3 | £100 |
| Secondary threshold | £97 | +£3 | £100 |
| Employees’ primary Class 1 rate between primary threshold and upper earnings limit | 11% | - | 11% |
| Employees’ primary Class 1 rate above upper earnings limit | 1% | - | 1% |
| Employees’ contracted-out rebate - salary-related schemes | 1.6% | - | 1.6% |
| Employees’ contracted-out rebate - money-purchase schemes | 1.6% | - | 1.6% |
| Married women’s reduced rate between primary threshold and upper earnings limit | 4.85% | - | 4.85% |
| Married women’s rate above upperearnings limit | 1% | - | 1% |
| Employers’ secondary Class 1 rate abovesecondary threshold | 12.8% | - | 12.8% |
| Employers’ contracted-out rebate, salary-related schemes | 3.5% | +0.2% | 3.7% |
| Employers’ contracted-out rebate, money-purchase schemes | 1% | +0.4% | 1.4% |
| Class 2 rate (per week) | £2.10 | +£0.10 | £2.20 |
| Class 2 small earnings exception | £4,465 per year | +£170 | £4,635 per year |
| Class 3 rate (per week) | £7.55 | +£0.25 | £7.80 |
| Class 4 lower profits limit | £5,035 per year | +£190 | +£5,225 per year |
| Class 4 upper profits limit | £33,540 per year | +£1,300 | £34,840 per year |
| Class 4 rate between lower profits limit and upper profits limit | 8% | - | 8% |
| Class 4 rate above upper profits limit | 1% | - | 1% |
Child Benefit and Guardian’s Allowance rates
| £ per week | 2006-07 | Change | 2007-08 |
| Eldest/Only Child |
£17.45
|
+£0.65
|
£18.10
|
| Other Children |
£11.70
|
+£0.40
|
£12.10
|
| Eldest/Only Child (Lone Parent Rate) |
£17.55
|
ABOLISHED
|
|
| Guardian’s Allowance |
£12.50
|
+£0.45
|
£12.95
|
Stamp taxes and duties Transfers of land and buildings (consideration paid)
| Rate | Residential in disadvantaged areas | Residential outside disadvantaged areas | Non-residential |
| Total value of consideration | |||
| Zero | £0 - £150,000 | £0 - £125,000 | £0 - £150,000 |
| 1% | Over £150,000 - £250,000 | Over £125,000 - £250,000 | Over £150,000 - £250,000 |
| 3% | Over £250,000 - £500,000 | Over £250,000 - £500,000 | Over £250,000 - £500,000 |
| 4% | Over £500,000 | Over £500,000 | Over £500,000 |
New leases (lease duty)
Duty on the premium is the same as for transfers of land (except that special rules apply for premium where rent exceeds £600 annually). Duty on the rent is charged on the Net Present Value (NPV). A per cent rate applies to the amount of NPV in excess of the threshold.
| Rate | Net Present Value of rent | |
| Residential | Non-residential | |
|
Slice of NPV
|
||
| Zero |
£0 - £125,000
|
£0 - £150,000
|
| 1% |
Over £125,000
|
Over £150,000
|
The rate of stamp duty/stamp duty reserve tax on the transfer of shares and securities is unchanged at 0.5 per cent for 2007-08.
Vehicle excise duty for Private and Light Goods VehiclesPre-graduated VED (registered before March 2001)
| £ per year | Change | New rate |
| 1549cc and below |
+£5
|
£115
|
| above 1549cc |
+£5
|
£180
|
Graduated VED for Private Vehicles (registered from March 2001)
|
£ per year
VED band |
CO 2 (g/km) | Change | Alternative Fuel cars | Petrol cars | Diesel cars |
| A |
100 and below
|
-
|
£0
|
£0
|
£0
|
| B |
101 to 120
|
-£15 / -£5 / -£15
|
£15
|
£35
|
£35
|
| C |
121 to 150
|
£5 / £15 / £5
|
£95
|
£115
|
£115
|
| D |
151 to 165
|
£5 / £15 / £5
|
£120
|
£140
|
£140
|
| E |
166 to 185
|
£5 / £15 / £5
|
£145
|
£165
|
£165
|
| F |
186 to 225
|
£10 / £15 / £10
|
£190
|
£205
|
£205
|
| G* |
226 and above
|
£85 / £90 / £85
|
£285
|
£300
|
£300
|
*for new cars registered from 23 March 2006
Vehicle excise duty for motorcycles| £ per year | Change | New rate |
| 150cc and below |
-
|
£15
|
| 151-400cc |
+£1
|
£32
|
| 401-600cc |
+£1
|
£47
|
| above 600cc |
+£2
|
£64
|
Changes to VED rates will take effect from 22 March 2007.
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