Tax Information 2007

INCOME TAX RATES 2007-2008 2007-2007
10% on first £2,230 £2,150
22% on next £32,370 £31,150
40% on income over £34,600 £33,300
Dividends for basic rate taxpayers 10% 10%
Dividends for higher rate taxpayers 32.5% 32.5%
Savings income for basic rate taxpayers 20% 20%
Savings income for higher rate taxpayers 40% 40%
Trusts within relevant property regime* 40% 40%
Dividends for trusts within relevant property regime 32.5% 32.5%
*from April 2006 a standard rate band of £1,000 applies, below this level income will be taxed at no more than 22%
MAIN INCOME TAX RELIEFS 2007-2008 2006-2007
Personal allowance (basic) £5,225 £5,035
Personal allowance (age 65-74) £7,550 £7,380
Personal allowance (age 75 and over) £7,690 £7,420
Married couple's allowance (where born before 6.4.35)* £6,285 £6,065
Married couple's allowance (age 75 and over)* £6,365 £6,135
Income limit for age-related allowances £20,900 £20,100
Blind person's allowance £1,730 £1,660
Enterprise Investment Scheme at 20%** £400,000 £400,000
Venture Capital Trust at 30% '£200,000 £200,000
Rent a room relief allowance £4,250 £4,250
*Allowance when relief is restricted to 10%
**Capital gains tax deferral relief also available

 

TRUSTS
The Finance 2006 introduced significant changes to the way in which trusts are treated for inheritance tax purposes. Transitional provisions apply to trusts in existence as at 22 March 2006. Special rules apply for income tax and capital gains tax purposes for settlor interested trusts.

 

PERSONAL PENSIONS
Annual Allowance
2006-07 2007-08 2008-09 2009-10 2010-11
£215,000 £225,000 £235,000 £245,000 £255,000
  1. An individual can contribute the lower of the allowance or relevant income.
  2. An individual without relevant income can contribute up to £3,600.
Lifetime Allowance
2006-07 2007-08 2008-09 2009-10 2010-11
£1.5m £1.6m £1.65m £1.75m £1.8m
  1. If the Lifetime Allowance is exceeded it may be possible to register for Primary or Enhanced protection. The election will need to be made by 5 April 2009.
  2. For years 2005-06 and earlier, contributions could be made based on a percentage of net relevant earnings and subject to an earnings cap.

 

BASIC STATE PENSION 2007-2008 2006-2007
Single person per year £4,539.60 £4,381.00
Dependant's addition per year £2,719.60 £2,626.00
Married couple total per year £7,259.20 £7,007.00

 

CAPITAL GAINS TAX 2007-2008 2006-2007
Individuals Tax rate aligned with those for savings
 Tax rate aligned with those for savings
Trusts generally 40% 40%
Annual Exemptions
Individuals and personal representatives £9,200 £8,800
Trusts generally £4,600 £4,400
Chattels exemption (5/3 taxable on excess) £6,000 £6,000

 

Taper Relief - for disposals on or after 6-4-06
Gains on business assets

 Gains on non-business assets
Period asset held (years) Percentage of gain chargeable Equivalent tax rates for higher rate/basic rate taxpayer Number of complete years after 5-4-98 for which asset held Percentage of gain chargeable Equivalent tax rates for higher rate/basic rate taxpayer
0-1 100 40/20 0 100 40/20
1-2 50 20/10 1 100 40/20
over 2 25 10/5 2 100 40/20



3 95 38/19



4 90 36/18



5 85 34/17



6 80 32/16



7 75 30/15



8 70 28/14



9 65 26/13



10 or more 60 24/12
For non-business assets acquired before 17-3-98 these qualify for an additional bonus year for the period for which they are treated as held after 5-4-98.

 

INHERITANCE TAX
2007-2008
2006-2007
Personal Relief
Free of tax up to £300,000 £285,000
Tax on excess 40% 40%
Transfers on certain trusts 20% 20%
Overseas domiciled spouse exemption £55,000 £55,000
Annual gifts exemption £3,000 £3,000
Gifts to charities Exempt Exempt
Small gifts to same person £250 £250
Marriage gifts by:
- Parent £5,000 £5,000
- Remoter ancestor/Party to marriage £2,500 £2,500
- Other person £1,000 £1,000
Business Property Relief
A business or interest in a business (including apartnership share) 100% 100%
Transfers of unquoted shareholdings(shares on the Unlisted Securities Market and the Alternative Investment Market are treated as unquotedshareholdings) 100% 100%
Transfers out of a controlling shareholding in fully quotedcompanies, land,buildings, machinery or plant used in business of company or partnership 50% 50%
Reduced tax 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%

 

CAR BENEFIT
* Taxable benefit for cars is based on a percentage of their list price, graduated according to their level of CO2 emissions.
* Minimum benefit is 15% of list price where CO2 emission does not exceed 140 g/km (2005-06 to 2007-08)
* Minimum will increase by 1% for each 5 g/km of extra CO2 emission subject to a maximum of 35% of list price.
* Diesel cars subject to 3% supplement (maximum of 35%)
* Special discounts can apply for energy efficient cars.
CAR FUEL
* Where free fuel for private use is provided, tax charge on fuel is calculated according to scale rate charge supplied to a standard figure of £14,400

 

NATIONAL INSURANCE CONTRIBUTIONS

2007-2008
2006-2007
Earnings pw
Earnings pw
Employees Class 1 NIC
Earnings at or above lower limit
Standard rate 0% up to £100
0% up to £97
Contracted in 11% on £100.01-£670
11% on £97.01-£645
Contracted out 9.4% on £100.01-£670
9.4% on £97.01-£645
Contracted in and out 1% over £670
1% over £645
Employers Class 1 NIC
Contracted in:
Below £100/£97 Nil
Nil
Over £100/£97 12.80%
12.80%
Contracted out: SR MP SR MP
Below £100/97 Nil Nil Nil Nil
Over £100/97 9.1% 11.4% 9.3% 11.8%
Over £670/£645 12/8% 12.8% 12.80% 12.8%
Class 2 - Self- employed rate £2.20 per week
£2.10 per week
Small earnings exception £4,635 per annum
£4,465 per annum
Class 3 - Voluntary rate £7.80 per week
£7.55 per week
Class 4 - Self-employed rate 8%
8%
Lower limot of earnings £5,225 per annum
£5,035 per annum
Upper limit of earnings £34,840 per annum
£33,540 per annum
1% on earnings over £34,840 per annum
£33,540 per annum

Notes:

  1. Contracted out rebates due for earnings between £87 and £100
  2. SR = Salary related scheme MP = Money purchase scheme

 

CORPORATION TAX
to 31-3-08
to 31-3-07
Small companies rate (£0-£300,000)
20%
19%
Marginal relief
£300,000.01-£1,500,000
£300,001-£1,500,000
Full rate (£1,500.001+)
30%
30%

 

MAIN CAPITAL ALLOWANCES
Plant and Machinery, Patent Rights, Know-How
Writing down allowance (reducing balance) 25% pa
Plant and Machinery:
First year allowance for expenditure incurred by small/medium-sized business 50%/40%
Motor Car:
- Writing down allowance (reducing balance) 25% pa.
Max £3,000 pa
- New car registered on or after 17.4.00 emitting up to 120 g/km of C02 or electrically propelled 100%
Enterprise Zone Buildings and Scientific Research
- initial allowance 100%
Industrial and Agricultural Buildings, Hotels, Docks etc:
- Writing down allowance (straight line)
4% pa
Investments in designated energy-saving plant and machinery
100%
Business Premises Renovation Allowance:
First year allowance for renovating/converting vacant business properties in designated disadvantaged areas
100%

 

VALUE ADDED TAX
Standard Rate
17.5%
Domestic fuel and power
5%
Registration level from from 1-4-07
£64,000
to 31-3-07
£61,000
De-registration limit from 1-4-07
£62,000
to 31-3-07
£59,000

 

STAMP DUTY LAND TAX on documents transferring residential property from 22-3-07
Value under £125,000
Nil
£125,001 - £250,000
1%
£250,001 - £500,000
3%
£500,001 +
4%
There is exemption from stamp duty relating to the purchase of residential and
non-residential property to the value of £150,000 in certain designated disadvantaged areas of the UK

 

INDIVIDUAL SAVINGS ACCOUNT (ISA)
Maximum subscription allowance for each component

2007-2008
MAXI - one ISA MANAGER
 £,7000
MINI
- the option to have an ISA Manager for each component £4,000 stocks & shares
£3,000 cash

 

IMPORTANT dates under self-assessment

31 July 2007
Second interim payment due for 2006-7

30 September 2007
Deadline for submission of 2006-07 tax return where you want the Inland Revenue to calculate any liability/repayment (unless submitted on-line by 31 January 2008)

31 January 2008
Deadline for submission of 2006-07 self-assessment tax return.
Taxpayer sends balancing payment required of 2006-07 liability to income tax and capital gains tax
First interim payment due for 2007-08 where required
Deadline for the Inland Revenue to call for documents supporting 2005-06 tax return, if return submitted by 31 January 2007
 
31 July 2008
Second interim payment due for 2007-08
 
31 October 2008
Deadline for submission of 2007-08 paper tax returns
 
31 January 2009
Deadline for submission of 2007-08 tax return where submitted on-line.
Deadline for the Inland Revenue to call for documents supporting 2006-07 tax return, if return submitted by 31 January 2008

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