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Income Tax, National Insurance (NIC), Dividend Tax rates - 2009/10

Posted Apr 5, 2009

Alongside a small increase in the personal allowance and taxable bands for the 2009/10 tax year, the Government has once again increased NIC rates significantly.

The tax rates on limited company dividends remain the same for 2009/10.

The small companies' corporation tax rate remains at 21%.

The 15% standard VAT rate and revised flat rate VAT rates remain in place until 31st December 2009.

We'll add further useful tax tables for the 2009/10 tax year shortly.

Personal allowance - 2009/10

2008-09

2009-10

Personal Allowance

£6,035

£6,475



Income tax rates and taxable bands

2008-09

2009-10

Starting rate for savings: 10%*

£0-£2,320

£0-£2,440

Basic rate: 20%

£0-£34,800

£0-£37,400

Higher rate: 40%

Over £34,800

Over £37,400


* From 2008-09 there is a 10% starting rate for savings income only. If your non-savings income is above this limit then the 10% starting rate for savings will not apply.

Dividend Tax Rates

The rates available for dividends are the 10% ordinary rate and the 32.5% dividend upper rate. Read our dedicated article on how dividends are taxed for more information.

National Insurance Contributions (NICs)

Also read our contractors' guide to national insurance.

£ per week

2007-08

2008-09

2009-10

Lower earnings limit, primary Class 1

£87

£90

£95

Upper earnings limit, primary Class 1

£670

£770

£844

Upper accruals point

N/A

N/A

£770

Primary threshold

£100

£105

£110

Secondary threshold

£100

£105

£110

Employees’ primary Class 1 rate between primary threshold and upper earnings limit

11%

11%

11%

Employees’ primary Class 1 rate above upper earnings limit

1%

1%

1%

Employers’ secondary Class 1 rate above secondary threshold

12.8%

12.8%

12.8%

Class 2 rate

£2.20

£2.30

£2.40

Class 2 small earnings exception

£4,635 per year

£4,825 per year

£5,075 per year

Class 3 rate

£7.80

£8.10

£12.05

Class 4 lower profits limit

£5,225 per year

£5,435 per year

£5,715 per year

Class 4 upper profits limit

£34,840 per year

£40,040 per year

£43,875 per year

Class 4 rate between lower profits limit and upper profits limit

8%

8%

8%

Class 4 rate above upper profits limit

1%

1%

1%

 

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