1 TAX RATES AND ALLOWANCES GIVEN IN THE EXAMINATION PAPER INCOME TAX...
1.1
Tax rates and allowances given in the examination paper
Income tax
Normal
Dividend
rates
%
%
Basic rate
£0 – £34,370
20
10
Higher rate
£34,371 to £150,000
40
32.5
Additional rate
£150,001 and over
50
42.5
A starting rate of 10% applies to savings income where it falls within the first £2,710
of taxable income.
Personal allowance
£
Personal allowance
Standard
8,105
Personal allowance
65 – 74
10,500
Personal allowance
75 and over
10,660
Income limit for age related allowances
25,400
Income limit for standard personal allowances
100,000
Car benefit percentage
The relevant base level of CO
2
emissions is 100 grams per kilometre.
The percentage rates applying to petrol cars with CO
2
emissions up to this level are:
75 grams per kilometre or less
5%
76 and 99 grams per kilometre
10%
100 grams per kilometre
11%
Car fuel benefit
The base figure for calculating the car fuel benefit is £20,200.
Individual savings accounts
The overall investment limit is £11,280, of which £5,640 can be invested in a cash
ISA.
Personal scheme limit
Annual
allowance
£50,000
The maximum contribution that can qualify for tax relief without any earnings is
£3,600.
Authorised mileage allowances: cars
Up to 10,000 miles
45p
Over 10,000 miles
25p
Capital allowances: rates of allowance
%
Plant and machinery
Main pool
18
Special rate pool
8
Motor cars
New cars with CO
2
emissions up to 110 grams per kilometre 100
CO
2
emissions between 111 and 160 grams per kilometre 18
CO
2
emissions over 160 grams per kilometre 8
Annual investment allowance
First £25,000 of expenditure 100
Corporation tax
Financial year
2010
2011
2012
Small profits rate
21%
20%
20%
Main rate
28%
26%
24%
Lower limit
300,000
300,000
300,000
Upper limit
1,500,000
1,500,000
1,500,000
Marginal relief fraction
7/400
3/200
1/100
Marginal relief
Standard fraction x (U – A) x N/A
Value added tax
Standard rate
20%
Registration limit
77,000
Deregistration limit
75,000
Inheritance tax
Inheritance tax: tax rates
£1 - £325,000
Nil
Excess: - Death rate
40%
‐
Lifetime rate
20%
Inheritance tax: taper relief
Years before death
Percentage
reduction %
Over 3 but less than 4 years
20
Over 4 but less than 5 years
40
Over 5 but less than 6 years
60
Over 6 but less than 7 years
80
Capital gains tax
Rates of tax
‐
Lower rate
18%
‐
Higher rate
28%
Annual exempt amount
£10,600
Entrepreneurs’ relief
‐
Lifetime limit
£10,000,000
‐
Rate of tax
10%
National Insurance contributions (not contracted out rates)
Class 1 Employee
£1 – £7,605 per year
Nil
£7,606 – £42,475 per year
12.0
£42,476 and above per year
2.0
Class 1 Employer
£1 – £7,488 per year
Nil
£7, 489 and above per year
13.8
Class 1A
13.8
Class 2
£2.65 per week
Small earnings exemption
£5,595
Class 4
£1 – £7,605 per year
Nil
£7,606 – £42,475 per year
9.0
Rates of interest
Official rate of interest:
4%
Rate of late payment interest:
3% (assumed)
Rate of repayment interest:
0.5% (assumed)
2 Retail price indices