IT Contractor Tax Limited Company Accounts Accounting

Independent Contractor Services
Free IR35 & Contractor Tax Review
Call free 0844 259 0025 | Email

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%
 

Please scroll down for related articles

Contractor Services


Related Articles

Contractor accountant warns over illegal dividend declarations
A leading contractor accountant looks at the rise in illegal dividends reported in recent months, and how limited company contractors should take care when making dividend declarations

Limited company directors warned over illegal dividends
A leading accountant says that the number of company directors taking illegal dividends or loans has risen at a rapid rate.

Limited company dividends - how much tax to pay?
If you are a limited company shareholder, how do you calculate the personal tax payable on dividends you receive?

IT contractors and Capital Gains Tax (CGT)
Following the Emergency Budget, many contractors will be aware that the higher CGT rate has risen to 28%, effective from 23rd June 2010.

What is entrepreneurs' relief?
If you sell all or part of your business, or its assets after trading as ceased, you may be able to claim entrepreneurs' relief on the proceeds and pay 10% instead of the standard CGT rate.

What can contractors expect from the 'emergency budget'?
The most eagerly anticipated Budget in decades is likely to contain significant changes to most areas of business and personal taxation. What can contractors expect on June 22nd?

Online accounting for contractors - what to look out for
As more and more contractors turn to web-based software to manage their accounts, we look at things to consider when choosing an online accountancy provider.

Coalition government - the tax consequences for contractors
What are the likely tax consequences for contractors and small businesses following the creation of a Conservative / Liberal Democrat coalition government?

P35 'service company' question for limited company contractors
The 'service company' question on the 2009/10 P35 employer annual return could cause limited company contractors some confusion once again this year.

How much should limited company contractors set aside for income tax?
For contractors deriving dividend income from their limited companies, how much income tax should they put aside?

Changes for VAT registered contractors from 1st April 2010
Any contractors registered for VAT should be aware of a number of changes to the VAT system, which take effect from 1st April 2010.

Income tax rates and taxable bands - 2010/11 tax year
The income tax rates and bands for the 2010-11 tax year, including the new 50% rate, the gradual personal allowance removal if you earn over six figures, and the new 42.5% dividend tax band.

Contractor tax records - how long should you keep them for?
HMRC has released a new guide explaining which tax and accounting records contractors should keep, and how long they should keep them for.

BN66 - an overview of the offshore tax avoidance rules
In March 2008, the Chancellor announced a crackdown on the 'abuse' of loopholes in the double taxation treaties which exist between the UK and other countries. An overview of BN66 in light of the recent Huitson/Montpelier High Court case.

Contractors urged to file tax returns online by Sunday 31st January
HMRC has reminded taxpayers that they need to complete their annual self assessment tax returns online by 31st of January, to avoid paying a penalty.

Qdosconsulting

Accountants

Umbrella Companies

Contractor Services

Contractor Financials

USEFUL TAX GUIDES