rates and allowance

Income tax allowances	2007-08 (£)	2006-07 (£)
Personal allowance	5,225	5,035
Personal allowance for people aged 65-74	7,550	7,280
Personal allowance for people aged 75 and over	7690	7,420
Income limit for age-related allowances	20,900	20,100
Married couple's allowance for people born before 6 April 1935	6,285	6,065
Married couple's allowance - aged 75 or more	6,365	6,135
Minimum amount of married couple's allowance	2,440	2,350
Blind person's allowance	1,730	1,660

The rate of relief for the continuing married couple's allowance and maintenance relief for people born before 6 April 1935, and for the children's tax credit, is 10%.

Taxable Bands Allowances	2007-08 (£)	2006-07 (£)
Starting rate 10%	0 - 2,230	0 - 2,150
Basic rate 22%	2,231-34,600	2,151 - 33,300
Higher rate 40%	Over 34,600	Over 33,300

All figures are weekly unless shown otherwise.

£ per week	2007-08	2006-07
Lower earnings limit, primary Class 1	£87	£84
Upper earnings limit, primary Class 1	£670	£645
Primary threshold	£100	£97
Secondary threshold	£100	£97
Employees’ primary Class 1 rate between primary threshold and upper earnings limit	11%	11%
Employees’ primary Class 1 rate above upper earnings limit	1%	1%
Employees’ contracted-out rebate	1.6%	1.6%
Married women’s reduced rate between primary threshold and upper earnings limit	4.85%	4.85%
Married women’s rate above upper earnings limit	1%	1%
Employers’ secondary Class 1 rate above secondary threshold	12.8%	12.8%
Employers’ contracted-out rebate, salary-related schemes	3.7%	3.5%
Employers’ contracted-out rebate, money-purchase schemes	1%	1%
Class 2 rate	£2.20	£2.10
Class 2 small earnings exception	£4,635 per year	£4,465 per year
Special Class 2 rate for share fishermen	£2.85	£2.75
Special Class 2 rate for volunteer development workers	£4.35	£4.20
Class 3 rate	£7.80	£7.55
Class 4 lower profits limit	£5,225 per year	£5,035 per year
Class 4 upper profits limit	£34,840 per year	£33,540 per year
Class 4 rate between lower profits limit and upper profits limit	8%	8%
Class 4 rate above upper profits limit	1%	1%

Capital Gains Tax: Individuals and Trustees

Annual exempt amount	2005-06 (£)	2006-07 (£)	2007-08 (£)
Individuals etc*	8,500	8,800	9,200
Other trustees	4,250	4,400	4,600

* Individuals, trustees of settlements for the disabled, and personal representatives of the estate of a deceased person.

The amount chargeable to CGT is added onto the top of income liable to income tax for individuals and is charged to CGT at these rates:

below the starting rate limit at 10%,
between the starting rate and basic rate limits at 20%,
and above the basic rate limit at 40%.

Indexation allowance

Individuals and others within the charge to capital gains tax are not entitled to indexation allowance for any period after April 1998. To calculate indexation allowance up to April 1998 on disposals on or after 6 April 1998, use the table below.

You work out the indexation allowance by multiplying the amount you spent by the indexation factor.

Pension schemes earnings cap

Tax Year	Amount (£)
1989-90	60,000
1990-91	64,800
1991-92	71,400
1992-93	75,000
1993-94	75,000
1994-95	76,800
1995-96	78,600
1996-97	82,200
1997-98	84,000
1998-99	87,600
1999-00	90,600
2000-01	91,800
2001-02	95,400
2002-03	97,200
2003-04	99,000
2004-05	102,000
2005-06	105,600

The main effect of the cap is to set a ceiling on the contributions that can be paid to, and the benefits that can be paid by, tax approved pension schemes. It generally applies to people who contribute to a personal pension scheme, joined an occupational scheme set up since 14 March 1989, or joined any occupational scheme from 1 June 1989, which was set up before 14 March 1989. From 6 April 2001 the cap will apply to people who contribute to stakeholder pension schemes.

**Approved mileage rates**
From 2002-2003	First 10,000 business miles in the tax year	Each mile over 10,000 miles in the tax year
Cars and vans	40p	25p
Motor cycles	24p	24p
Bicycles	20p	20p

Passenger payments - cars and vans

5p per passenger per business mile for carrying fellow employees in a car or van on journeys which are also journeys for them. Only payments specifically for carrying passengers count and there is no relief if you receive less, or nothing at all.

Company Cars

The charge is based on the price of the car for tax purposes (normally the list price) and accessories multiplied by an appropriate percentage based on the level of CO2 emissions and the fuel the car uses. There is a ready-reckoner of appropriate percentages for petrol-powered cars and summaries of adjustments to those percentages for years from 2002/03 to 2005/06 and for years from 2006/07 onwards.

Company Vans

The rules on which the charge is based were changed from 2005/06. The charges are:

Type	years to 2006/07	years from 2007/08
Van less than 4 years old at the end of the tax year	£500	£3,000
All other vans	£350	£3,000

Fuel charges – company cars and vans

Cars: to calculate the benefit charge on free or subsidised fuel for private use, the appropriate percentage used in calculating car benefit is multiplied by a set figure for the tax year. From 2003-04 the set figure is £14,400.

Vans: the fuel charge began in 2005-06 but only has practical effect from 2007-08, when the benefit charge for a year is £500.

Working and Child Tax Credits rates

£ per year (unless stated)	2007-08	2006-07
Working Tax Credit
Basic element	£1,730	£1,665
Couple and lone parent element	£1,700	£1,640
30 hour element	£705	£680
Disabled worker element	£2,310	£2,225
Severe disability element	£980	£945
50+ Return to work payment (16-29 hours)	£1,185	£1,140
50+ Return to work payment (30+ hours)	£1,770	£1,705
Childcare element of the Working Tax Credit
Maximum eligible cost for one child	£175 per week	£175 per week
Maximum eligible cost for two or more children	£300 per week	£300 per week
Percentage of eligible costs covered	70%	80%
Child Tax Credit Family element	£545	£545
Family element, baby addition	£545	£545
Child element	£1,845	£1,765
Disabled child element	£2,440	£2,350
Severely disabled child element	£980	£945
Income thresholds and withdrawal rates
First income threshold	£5,220	£5,220
First withdrawal rate (per cent)	37%	37%
Second income threshold	£50,000	£50,000
Second withdrawal rate (per cent)	6.67%	6.67%
First threshold for those entitled to Child Tax Credit only	£14,495	£14,155
Income disregard	£25,000	£25,000

Child Benefit/Guardian Allowance

£ per week	2007-08	2006-07
Eldest/Only Child	£18.10	£17.45
Other Children	£12.10	£11.70
Eldest/Only Child (Lone Parent Rate)	n/a	£17.55
Guardian’s Allowance	£12.95	£12.50

Please note that the applicable rate of Stamp Duty Land Tax must be applied to the whole of the consideration paid to acquire the land / buildings

Land Transactions with an effective date on or after 23rd March 2006

Transfers of land and buildings (consideration paid)
Rate	Land in disadvantaged areas - Residential	Land in disadvantaged areas - Non-residential	All other land in the UK - Residential	All other land in the UK - Non-residential
Zero	£0 - £150,000	£0 - £150,000	£0 - £125,000	£0 - £150,000
1%	Over £150,000 - £250,000	Over £150,000 - £250,000	Over £125,000 - £250,000	Over £150,000 - £250,000
3%	Over £250,000 - £500,000	Over £250,000 - £500,000	Over £250,000 - £500,000	Over £250,000 - £500,000
4%	Over £500,000	Over £500,000	Over £500,000	Over £500,000

N.B. Disadvantaged Area Relief for non-residential land transactions is not available for non-residential land transactions with an effective date on or after 17 March 2005.

However the relief is preserved for:

the completion of contracts entered into and substantially performed on or before 16 March 2005
the completion or substantial performance of other contracts entered into on or before 16 March 2005, provided that there is no variation or assignment of the contract or sub-sale of the property after 16 March 2005 and that the transaction is not in consequence of the exercise after 16 March 2005 of an option or right of pre-emption.

New leases (lease duty)

Duty on rent
Rate	Net present value of rent - Residential	Net present value of rent - Non-residential
Zero	£0 - £125,000	£0 - £150,000
1%	Over £125,000	Over £150,000

Please note that when calculating duty payable on the 'NPV' (Net Present Value) of leases, you must reduce your 'NPV' calculation by the following before applying the 1% rate.

Residential - £125,000
Non-Residential - £150,000

Duty on premium is the same as for transfers of land (except special rules apply for premium where rent exceeds £600 annually).

The rate of stamp duty / stamp duty reserve tax on the transfer of shares and securities is unchanged at 0.5% for 2007-08.

Contents