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.