Budget 2008 (TAKE TWO): Tax tables 2008/09

Updated tables following the chancellor of the exchequor’s announcement on 13 May 2008 to increase the personal allowance (age under 65) by an extra £600.

National Insurance:

Note that the lower limit for employees and the self-employed for National Insurance are no longer aligned with personal allowances.

For example: Employee on £18,000 p.a.

Gross pay for tax 18,000 Gross for National insurance 18,000
Personal allowance 6,035 Primary threshold £105 x 52 weeks 5,460
Net for tax 11,965 Net earnings for NI 12,540
Tax @ 20% 2,393.00 NI @ 11% 1,379.40
Total tax and NI = £3,772.40

For example: Self-employed with profits of £18,000 p.a

Profit for tax 18,000 Profit for NI 18,000
Personal allowance 6,035 Lower Class 4 NI threshold 5,435
Taxable 11,965 NI’able 12,565
Tax @ 20% 2,393 NI @ 8% 1,005.20
Class 2 NI £2.30 119.60
Total tax and NI = £3,517.80

2008 Budget tables:

Income tax, capital gains tax, and inheritance tax

£ per year (unless stated) 2007-08 Change 2008-09
Income tax personal and age-related allowances
Personal allowance (age under 65) £5,225 +£810 £6,035
Personal allowance (age 65-74) £7,550 +£1,480 £9,030
Personal allowance (age 75 and over) £7,690 +£1,490 £9,180
Married couple’s allowance* (aged less than 75 and born before 6th April 1935) £6,285 +£250 £6,535
Married couple’s allowance* (age 75 and over) £6,365 +£260 £6,625
Married couple’s allowance* – minimum amount £2,440 +£100 £2,540
Income limit for age-related allowances £20,900 +£900 £21,800
Blind person’s allowance £1,730 +£70 £1,800
Capital gains tax annual exempt amount
Individuals etc. £9,200 +£400 £9,600
Most trustees £4,600 +£200 £4,800
Individual inheritance tax allowance £300,000 +£12,000 £312,000
Pension schemes allowances
Annual Allowance £225,000 +£10,000 £235,000
Lifetime Allowance £1,600,000 +£50,000 £1,650,000

* Married couple’s allowance is given at the rate of 10%.

Income tax: Taxable bands

2007-08 £ per year 2008-09 £ per year
Starting rate: 10% £0-£2,230
Basic rate: 22% £2,231-£34,600 Basic rate: 20%* £0-£34,800
Higher rate: 40% Over £34,600 Higher rate: 40%* Over £34,800

* There will be a new 10% starting rate for savings income only, with a limit of £2320. If an individual’s taxable non-savings income is above this limit then the 10% savings rate will not be applicable. There are no changes to the 10% dividend ordinary rate or the 32.5% dividend upper rate.

Corporation tax on profits

£ per year (unless stated) 2007-08 2008-09
£0-£300,000 20% 21%
£300,001 – £1,500,000 Marginal relief Marginal relief
£1,500,001 or more 30% 28%

National insurance contributions

£ per week (unless stated) 2007-08 Change 2008-09
Lower earnings limit, primary Class 1 £87 +£3 £90
Upper earnings limit, primary Class 1 £670 +£100 £770
Primary threshold £100 +£5 £105
Secondary threshold £100 +£5 £105
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 – salary-related schemes 1.6% 1.6%
Employees’ contracted-out rebate – money-purchase schemes 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% 3.7%
Employers’ contracted-out rebate, money-purchase schemes 1.4% 1.4%
Class 2 rate £2.20 +£0.10 £2.30
Class 2 small earnings exception (per year) £4,635 +£190 £4,825
• Special Class 2 rate for share fishermen £2.85 +0.10 £2.95
Special Class 2 rate for volunteer development workers £4.35 +£0.15 £4.50
Class 3 rate (per week) £7.80 £0.30 £8.10
Class 4 lower profits limit (per year) +£5,225 +£210 £5,435
Class 4 upper profits limit (per year) £34,840 +£5,200 £40,040
Class 4 rate between lower profits limit and upper profits limit 8% 8%
Class 4 rate above upper profits limit 1% 1%

Working and child tax credits rates

£ per year (unless stated) 2007-08 Change 2008-09
Working Tax Credit
Basic element £1,730 +£70 £1,800
Couple and lone parent element £1,700 +£70 £1,770
30 hour element £705 +£30 £735
Disabled worker element £2,310 +£95 £2,405
Severe disability element £980 +£40 £1,020
50+ Return to work payment (16-29 hours) £1,185 +£50 £1,235
50+ Return to work payment (30+ hours) £1,770 +£70 £1,840
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 80% 80%
Child Tax Credit
Family element £545 £545
Family element, baby addition £545 £545
Child element £1,845 +£240 £2,085
Disabled child element £2,440 +£100 £2,540
Severely disabled child element £980 +£40 £1,020
Income thresholds and withdrawal rates
First income threshold £5,220 +£1,200 £6,420
First withdrawal rate 37% +2% 39%
Second income threshold £50,000 £50,000
Second withdrawal rate 6.67% 6.67%
First threshold for those entitled to Child Tax Credit only £14,495 +£1,080 £15,575
Income disregard £25,000 £25,000

Child benefit and guardian’s allowance rates from 6 April 2008

£ per week 2007-08 Change 2008-09
Eldest/Only Child £18.10 +£0.70 £18.80
Other Children £12.10 +£0.45 £12.55
Guardian’s Allowance £12.95 +£0.50 £13.45

Stamp taxes and duties

Transfers of land and buildings (consideration paid)

Rate Residential in disadvantaged areas Residential outside disadvantaged areas Non-residential
Total value of consideration
Zero £0 – £150,000 £0 – £125,000 £0 – £150,000
1% 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
4% Over £500,000 Over £500,000 Over £500,000

New leases (lease duty)Duty on the premium is the same as for transfers of land (except that special rules apply for non-residential land and property premium where rent exceeds £1,000 annually. The rules no longer apply to residential property from 12 March 2008). Duty on the rent is charged on any part of the net present value (NPV) which exceeds the threshold.

Rate Net Present Value of rent
Residential in disadvantaged areas Residential outside disadvantaged areas Non-residential
Slice of NPV
Zero £0 – £150,000 £0 – £125,000 £0 – £150,000
1% Over £150,000 Over £125,000 Over £150,000

Transfers of shares and stocksThe rate of stamp duty/stamp duty reserve tax on the transfer of shares and securities is unchanged at 0.5 per cent for 2008-09.

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