Tax Rates & Allowances

Plant and machinery*

Motor cars

Industrial buildings

Agricultural buildings

Hotels

*For small businesses: first year allowances (FYAs) of 50% for 24 months from 6.4.06 (1.4.06 for companies). 40% otherwise.

For medium-sized businesses: FYAs of 40%.

For all businesses: 100% FYAs on expenditure on energy saving plant and machinery.

**100% FYAs on new cars with CO2 emissions not exceeding 120 gm/km until 31.3.08.

# 6% on certain life long assets.

Individuals

- exemption

Balance of gains (reduced by taper relief) charged as top slice of income (at savings rates - ie 10%, 20% or 40%)

Trusts

- exemption

- balance of gains (reduced by taper relief)

Taper relief 2007/08 and 2006/07 disposals
Percentage relief depends on number of complete years asset owned after 5.4.98.

*Add one extra year if asset owned before 17.3.98 (subject to overriding max. of 40%)..

Company cars

• For diesel cars add a 3% supplement, but maximum still 35%. This is waived for Euro IV diesels. For 2006/07, no waiver for diesels registered on/after 1 January 2006.
• Discounts apply to certain environmentally friendly cars.
• For cars registered before 1.1.98 charge is based on engine size.
• The list price includes accessories and is subject to an upper limit of £80,000.
• List price is reduced for capital contributions made by the employee up to £5,000.

Fuel benefits

• The fuel benefit 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.
  
  

Van benefit per vehicle

Notes

1. The charges will not apply if a "restricted private use condition" is met throughout the tax year.
2. Van benefits include fuel for private use.

Small companies rate

Marginal (small companies) rate

Full rate

Small companies fraction

* Except dividends (10%) and savings income (20%).

** Except dividends (32.5%).

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

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

% of death charge

Overall investment limit

- stocks, shares and life insurance

- cash

Class 1 (employed)
Contracted in

2007/08 Rates

Weekly earnings

Up to £100

Over £670

* Entitlement to contribution-based benefits retained for earnings between £87.01 and £100 per week.

** On earnings above £100.

^† On earnings above £670.

Class 1A (employers)

12.8% on employee taxable benefits

Class 1B (employers)

12.8% on PAYE Settlement Agreements

Class 2 (self-employed)

flat rate per week £2.20
small earnings exception p.a. £4,635

Class 3 (voluntary)

flat rate per week £7.80

Class 4 (self-employed)

8% on profits between £5,225 and £34,840 plus 1% on profits over £34,840

• Tax relief available for personal contributions: higher of £3,600 (gross) or 100% of relevant earnings
  
  
• 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.
  
  
• Any contributions in excess of £225,000 (£215,000), whether personal or by the employer, will be subject to income tax on the individual at 40%.
  
  
• No carry back of pensions contributions.
  
  

Basic retirement pension

- single person

- married couple

Statutory pay rates - average weekly earnings £87 (£84) or over

Statutory Sick Pay

Statutory Maternity Pay

- first six weeks

- next 33 weeks**

Statutory Paternity Pay - two weeks

Statutory Adoption Pay - 39 weeks**

* Or 90% of weekly earnings if lower
** For children due/placed from 1 April 2007.

Shares and securities - rate 0.5%

Working Tax Credit (WTC)

Basic element - max.

Childcare element
80% of eligible costs up to £175 per week (£300 if two or more children)

Child Tax Credit (CTC)

Child element per child - max.

Family element

Baby addition

Flat Rate Scheme - allows businesses to calculate their VAT payment as a percentage of their VAT inclusive turnover.
Limits - annual VAT exclusive taxable turnover does not exceed £150,000 and total VAT exclusive annual turnover does not exceed £187,500. Leave on anniversary of scheme where total VAT inclusive annual turnover exceeds £225,000.

Cash Accounting - allows businesses to account for input and output VAT on a paid and received basis.
Limits from 1 April 2007 - where annual VAT exclusive taxable turnover does not exceed £1,350,000. Leave at end of a VAT period where annual VAT exclusive taxable turnover exceeds £1,600,000.

Annual Accounting - allows businesses to smooth out cash flow by paying a set amount, either monthly or quarterly. Only one VAT return due a year.
Limits - where annual VAT exclusive taxable turnover does not exceed £1,350,000. Leave on anniversary of scheme where annual VAT exclusive taxable turnover exceeds £1,600,000.

VAT Fuel Scale Charges:

Periods commencing from 1 May 2007

The output VAT charge payable by VAT registered businesses which allow their employees to claim all the fuel expenses on their company cars and reclaim VAT on the full amount of fuel purchased without making an adjustment for private use.

For periods commencing from 1 May 2007 the fuel scale charges are calculated on the basis of the car's carbon dioxide emissions.

The fuel scale charge for a 3 month period is detailed below:

For monthly or annual VAT return periods separate tables are available. Please use the following link http://www.hmrc.gov.uk/budget2007/bn55.htm