Income Tax Rates

  2013-2014   2012-2013
Band £ Rate % Band £ Rate %
Starting rate for Savings 0 - 2,790 10* 0 - 2,710 10*
Basic rate 0 - 32,010 20 0 - 34,370 20
Higher rate 32,011 - 150,000 40 34,371 - 150,000 40
Additional rate Over 150,000 45 Over 150,000 50

* The 10% rate is not available if taxable non-savings income exceeds £2,790 (£2,710). It applies to savings income only. Non saving income applies on employment, profit from self employment , pensions, income from property and taxable benefits.


The rates available for dividends are the 10 per cent ordinary rate, the 32.5 per cent dividend upper rate and the dividend additional rate of 42.5 per cent (the dividend additional rate is 37.5 per cent from 2013-14)


Other income taxed first, then savings income and finally dividends.


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Income Tax Reliefs

  2013-2014   2012-2013
£ £
Personal allowance for people born after 5 April 1948 (1) 9,440 8,105
born between 6 April 1938 and 5 April 1948/ 65 - 74(2) 10,500 10,500
born before 6 April 1938* / 75 and over*(1&2) 10,660 10,660
Married couple's allowance (relief at 10%) (3) (Either partner 75 or over and born before 6 April 1935.) 7,915 7,705
Blind person's allowance 2,160 2,100

1. From 2013-14 The Personal Allowance reduces where the income is above £100, 000 - by £1 for every £2 of income above the £100,000 limit. This reduction applies irrespective of age.


2. These allowances reduce where the income is above the income limit by £1 for every £2 of income above the limit. The Personal Allowance for people aged 65 and over (up to and including 2012-13) and born before 6 April 1948 (from 2013-14) can be reduced below the basic Personal Allowance where the income is above £100,000


3. Tax relief for the Married Couple's Allowance is given at the rate of 10 per cent


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Income Tax Credits

  2013-2014   2012-2013
£ £
Working Tax Credit
Basic element - maximum Disability element 1,920 1,920
Childcare element 70% of eligible costs up to £175 per week (£300 if two or more children).
Child Tax Credit (CTC)
Child element per child - max. 2,720 2,690
Family element 545 545

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Reductions in maximum rates


1. 41% of income above £6,420* p.a.


2. *If only CTC is claimed, the threshold is £15,910 (£15,860) p.a. The family element of CTC tapers immediately after the child element from April 2012. The withdrawal rate is 41%.


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Pension Premiums


2013/14 and 2012/13


1. Tax relief available for personal contributions: higher of £3,600 (gross) or 100% of relevant earnings.


2. Any contributions in excess of £50,000, whether personal or by the employer, may be subject to income tax on the individual.


3. Where the £50,000 limit is not fully used it may be possible to carry the unused amount forward for three years.


2. Employers will obtain tax relief on employer contributions if they are paid and made 'wholly and exclusively'. Tax relief for large contributions may be spread over several years.


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Car, Van And Fuel Benefits


2013/14


CO2 emissions (gm/km) (round down to nearest 5gm/km) % of car's list price taxed
up to 94 10
95 11
100 12
105 13
110 14
115 15
120 16
125 17
130 18
135 19
140 20
145 21
150 22
155 23
160 24
165 25
170 26
175 27
180 28
185 29
190 30
195 31
200 32
205 33
210 34
215 and above 35

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Company cars


2013/14 and 2012/13


1. For diesel cars add a 3% supplement but maximum still 35%.


2. A 0% rate applies to cars which cannot emit CO2 when driven.


3. A 5% rate applies to cars with emissions which do not exceed 75 gm/km when driven. The diesel supplement can apply to 75 gm/km cars.


4. For cars registered before 1 January 1998 the charge is based on engine size.


5. The list price includes accessories and is not subject to an upper limit.


6. The list price is reduced for capital contributions made by the employee up to £5,000.


7. Special rules may apply to cars provided for disabled employees.


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Car fuel benefit 2013/14


£21,100 x 'appropriate percentage'*


2. *Percentage used to calculate the taxable benefit of the car for which the fuel is provided.


3. The charge does not apply to certain environmentally friendly cars.


4. The charge is proportionately reduced if provision of private fuel ceases part way through the year. The fuel benefit is reduced to nil only if the employee pays for all private fuel.


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Van benefit per vehicle 2013/14


Van benefit £3,000


Fuel benefit £564


The charges do not apply to vans which cannot emit CO2 when driven or if a 'restricted private use condition' is met throughout the year.


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Mileage Allowance Payments

  2013/14 and 2012/13
Cars and vans Rate per mile
Up to 10,000 miles 45p
Over 10,000 miles 25p
Bicycles 45p
Motorcycles 20p

These rates represent the maximum tax free mileage allowances for employees using their own vehicles for business. Any excess is taxable. If the employee receives less than the statutory rate, tax relief can be claimed on the difference.


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Individual Savings Accounts (ISAs)

  2013-2014   2012-2013
£ £
Overall annual investment limit 11,520 11,280
Comprising - cash up to 5,760 max. 5,640 max
Comprising - balance in stocks and shares 11,520 max 11,280 max

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Corporation Tax

  Year to 31.3.14   Year to 31.3.13
Profits band £ Rate % Profits band £ Rate %
Small companies rate 0 - 300,000 20* 0 - 300,000 20*
Marginal (small companies) rate 300,001 - 1,500,000 23.75* 300,001 - 1,500,000 25*
Main rate Over 1,500,000 23* Over 1,500,000 24*
Standard fraction 3/400* 1/100*

The profits limits are reduced for accounting periods of less than 12 months and for a company with associated companies.


*Different rates apply for ring-fenced (broadly oil industry) profit.


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Capital Allowances


Plant and machinery - Annual Investment Allowance (AIA)


The AIA gives a 100% write-off on most types of plant and machinery costs, including integral features and long life assets but not cars, of up to £250,000 p.a. for expenditure incurred on or after 1 January 2013 (£25,000 for expenditure incurred on or after 6 April 2012 (1 April 2012 for companies)). Special rules apply to accounting periods straddling these dates.


Any costs over the AIA fall into the normal capital allowance pools below. The AIA may need to be shared between certain businesses under common ownership.


Other plant and machinery allowances


The annual rate of allowance is 18%. An 8% rate applies to expenditure incurred on integral features and on long life assets.


A 100% first year allowance may be available on certain energy efficient plant and cars, including expenditure incurred on new and unused zero emission goods vehicles.


Cars


For expenditure incurred on cars, costs are generally allocated to one of the two plant and machinery pools. For expenditure incurred on or after 6 April 2013 (1 April 2013 for companies) cars with CO2 emissions not exceeding 130gm/km (previously 160gm/km) receive an 18% allowance p.a. Cars with CO2 emissions over 130gm/km (160gm/km) receive an 8% allowance p.a.


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Value Added Tax


2013/14


Standard rate 20%
Reduced rate 5%
Annual Registration Limit - from 1.4.13 (1.4.12 - 31.3.13 £77,000) £79,000
Annual Deregistration Limit - from 1.4.13 (1.4.12 - 31.3.13 £75,000) £77,000

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Capital Gains Tax

  2013/14   2012/13
Individuals £ £
Exemption 10,900 10,600
Standard rate 18% 18%
Higher rate* 28% 28%
Trusts
Exemption 5,450 5,300
Rate 28% 28%

*For higher and additional rate taxpayers


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Entrepreneur's Relief


For disposals on or after 6 April 2011 the first £10m (£5m for disposals on or after 23 June 2010 and before 6 April 2011) of qualifying gains are charged at 10%. Gains in excess of the limit are charged at the rates detailed above.


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Inheritance Tax

Death rate % Lifetime rate % Chargeable transfers 2013/14 and 2012/13 £'000
Nil Nil 0 - 325*
40 20 Over 325*
Higher rate* 28% 28%

*Potentially increased for surviving spouses or civil partners who die on or after 9 October 2007.


Reliefs

Annual exemption £3,000 Marriage - parent £5,000
Small gifts £250 - grandparent £2,500
- bride/groom £2,500
- other £1,000

Reduced 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

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Stamp Duty & Stamp Duty Land Tax


Land and buildings (on full consideration paid)

Rate Residential property* Non-residential
Disadvantaged areas* Other
£ £ £
Nil 0 - 150,000 0 - 125,000 0 - 150,000
1% 150,001 - 250,000 125,001 - 250,000 150,001 - 250,000
3% 250,001 - 500,000 250,001 - 500,000 250,001 - 500,000
4% 500,001 - 1,000,000 500,001 - 1,000,000 Over 500,000
5% 1,000,000 - 2,000,000 1,000,000 - 2,000,000 -
7% Over 2,000,000 Over 2,000,000 -

The rules for disadvantaged areas are withdrawn for transactions with an effective date on or after 6 April 2013. Shares and securities - rate 0.5%.


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National Insurance


2013/14 Class 1 (employed) contracted in rates

Employee Employer
Earnings per week % Earnings per week %
Up to £149 Nil* Up to £148 Nil*
£149.01 - £797 12 Over £148 13.8
Over £797 2

*Entitlement to contribution-based benefits retained for earnings between £109 and £149 per week.


Class 1A (employers) 13.8% on employee taxable benefits
Class 1B (employers) 13.8% on PAYE Settlement Agreements
Class 2 (self-employed) flat rate per week £2.70 small earnings exception p.a. £5,725 p.a.
Class 3 (voluntary) flat rate per week £13.55
Class 4 (self-employed) 9% on profits between £7,755 and £41,450 plus 2% on profits over £41,450

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