TAX FACTS 2003/2004
Income Tax Rates
|
|
Bands, Ј(GBP)
|
Rate,%
|
Tax on band, Ј(GBP)
|
| 1-1,960 |
10 |
196 |
| 1,961-30,500 |
22 |
6,278 |
| Over 30,500 |
40 |
|
|
| Dividends receive a 10%
tax credit. Higher rate taxpayers pay further tax of
22.5% |
|
Allowances and Reliefs
| |
Ј(GBP)
|
| Personal allowance |
4,615
|
| Married couple's allowance |
nil
|
| Additional personal allowance |
nil
|
| Children's Tax Credit |
nil
|
| Children's Tax Credit - baby rate |
nil
|
| Age allowance |
| Single person |
| aged 65-74 |
6,610
|
| aged 75 and over |
6,720
|
| Married couple's allowance |
| aged 65-74 |
5,565*
|
| aged 75 and over |
5,635*
|
| Age allowance reduced by 1/2 |
| of income over |
18,300
|
| Blind person's allowance |
1,510
|
| Rent a room |
4,250
|
|
Corporation Tax
|
Year to 31 March
|
| Taxable profit |
| Ј(GBP)1-Ј(GBP)10,000 |
0%
|
| Ј(GBP)10,001-Ј(GBP)50,000* |
23,75%
|
| Ј(GBP)50,001-Ј(GBP)300,000 |
19%
|
| Ј(GBP)300,001-Ј(GBP)1,500,000** |
32,75%
|
| Over Ј(GBP)1,500,001 |
30%
|
| |
| *Marginal relief fraction |
19/400
|
| **Marginal relief fraction |
11/400
|
|
Capital Allowances
| |
First year/Initial Allowance
|
Writing-down Allowance
|
| Plant & Machinery - Long Life |
nil
|
6%
|
| Plant & Machinery - Energy Saving |
100%
|
nil
|
| Plant & Machinery - other |
40%*
|
25%
|
| Low emission cars |
100%
|
nil
|
| Industrial Buildings |
nil
|
4%
|
| Agricultural Buildings |
nil
|
4%
|
| Enterprise Zone |
100%
|
nil
|
| Scientific Research |
100%
|
nil
|
| |
| * Only available for qualifying
expenditure incurred by small or medium size businesses.
Until 31 March 2004, 100% first year allowances are
available for investments by small enterprises on information
and communication technology. |
|
Capital Gains Tax
| |
Ј(GBP)
|
| Annual exemption |
| - individuals |
7,900
|
| - settlements |
3,950
|
| Retirement relief (available from
age 50) |
| - exempt gains |
0
|
| - 50% reduction of gains up to |
0
|
| |
| For gains realised after 5 April
1998, indexation allowance is frozen and the gain reduced
by a tapering relief according to how the asset has
been held after 5 April 1998 |
| Different rates of taper relief
apply dependent on whether the disposal is of a business
or non business asset. |
|
| Number of complete years after 5.04.98
for which asset held |
Business assets chargeable for disposals
in 2003/2004 |
Business assets equivalent tax rate for higher
rate taxpayer |
Non business assets chargeable for
disposals in 2003/2004 |
| |
% |
% |
% |
| 0 |
100 |
40 |
100 |
| 1 |
50 |
20 |
100 |
| 2 |
25 |
10 |
100 |
| 3 |
25 |
10 |
95 |
| 4 |
25 |
10 |
90 |
| 5 |
25 |
10 |
85 |
| 6 |
25 |
10 |
80 |
| 7 |
25 |
10 |
75 |
| 8 |
25 |
10 |
70 |
| 9 |
25 |
10 |
65 |
| 10 or more |
25 |
10 |
60 |
|
Car Scale Benefit
| Since 6 April 2002 car
benefit is based on a percentage of the car's list price
(subject to a ceiling of Ј(GBP)80,000) graduated according
to the level of the car's CO2 emissions.
This applies to cars first registered on or after 1
January 1998. There are different rules for older cars
and those with no CO2 figure. |
| Discounts apply for cars,
which run on alternative fuels such as electric, Battery
and liquefied petroleum gas. Supplements apply if the
car runs solely on diesel. |
| CO2 emissions g/km |
% of car price |
CO2 emissions g/km |
% of car price |
| 155 |
15 |
210 |
26 |
| 160 |
16 |
215 |
27 |
| 165 |
17 |
220 |
28 |
| 170 |
18 |
225 |
29 |
| 175 |
19 |
230 |
30 |
| 180 |
20 |
235 |
31 |
| 185 |
21 |
240 |
32 |
| 190 |
22 |
245 |
33 |
| 195 |
23 |
250 |
34 |
| 200 |
24 |
255 |
35 |
| 205 |
25 |
|
|
| Business mileage
is no longer relevant for car benefits, nor is the age
for cars registered from 1 January 1998 onwards. |
|
Car Fuel Benefit
| From 6 April 2003 car
fuel benefit is based on a percentage of a set figure,
which for 2003/04 is Ј(GBP)14,400. The same percentage
figure as for car scale benefit (detailed above) will
be used. |
|
Inland Revenue Mileage Rates
| Approved Inland Revenue
tax-free mileage rates |
| Mileage |
For 2003/2004 |
| Up to 10,000 miles |
40p |
| Over 10,000 miles |
25p |
|
Employment Benefits
| Applies to most directors and all employees
earning at a rate of Ј(GBP)8,500 p.a. or more. |
| Beneficial loans |
| Official rate of interest for 2003/2004 -
5%. |
| Use of assets |
| Benefit is 20% of market value or cost to
employer (if greater) plus relevant expenses. Special
rules for property. |
|
Individual Savings Accounts
| The ISA annual contribution limit of Ј(GBP)7,000
lasts until 5 April 2006. There are limits of Ј(GBP)3,000
for the cash element and Ј(GBP)1,000 for the life assurance
element. Savers are exempt from Income and Capital Gains
Tax and a 10% tax credit will be paid on dividends from
UK equities until 5 April 2004. |
|
Charitable Giving
There is no minimum amount for a Gift Aid
donation and all cash donations, of whatever size, made
by a UK taxpayer are eligible for Gift Aid relief.
Gift Aid declarations can be made in writing, on the
telephone or over the internet and must contain the
name and address of the donor, the name of the charity
and a statement that the donor pays sufficient income
or capital gains tax to cover the tax reclaimed by the
charity.
Tax relief for donations made under a deed of covenant
is given under Gift Aid rules. From 1 April 2000 company
donations to charity are made gross. The company claims
tax relief in its computation and the charity receives
no additional tax reclaim.
Since 6 April 2003 higher rate taxpayers can carry back
their portion of Gift Aid relief (18%) to the previous
year. From April 2004, taxpayers will be able to nominate
a charity to receive all or part of a tax repayment
due to them.
Income and Capital Gains Tax relief applies for gifts
to charity of listed shares and securities, AIM shares,
units in authorised unit trusts and shares in OEIC's
as land and buildings. |
|
|
Example:
|
Ј(GBP)
|
| Tax relief to individual (40%
taxpayer) |
| Net donation paid |
780
|
| Higher rate tax relief on grossed
up donation |
| (18% x Ј(GBP)1,000) |
(180)
|
| Net cost to individual |
600
|
| Charity's position |
| Net donation |
780
|
| Grossed up at 22% |
220
|
| Gross receipt |
1,000
|
|
VAT
|
From 1.4.2003
|
| Standard Rate |
17.5%
|
| Fuel and Power Rate |
5%
|
| Installation of energy saving material |
5%
|
| VAT on fraction of gross price |
7/47
|
| Certain housing refurbishment work |
5%
|
| Annual Turnover Limits* (based on previous
12 months) |
|
| Registration |
Ј(GBP) 56,000
|
| Deregistration |
Ј(GBP) 54,000
|
| *From 10 April 2003 |
|
Inland Revenue Interest Rates
| Income Tax/Capital
Gains Tax |
| - late paid tax |
6.5%
|
| - over paid tax |
2.5%
|
| Corporation tax - periods ended
pre 1.7.99 |
| - late paid tax |
5%
|
| - over paid tax |
2%
|
| Corporation tax - periods ended
pre 30.6.99 |
| - late paid tax |
6.5%
|
| - over paid tax |
3%
|
| Corporation Tax quarterly instalment
payments |
| - under paid instalments |
4.75%
|
| - over paid instalments |
3.5%
|
| Inheritance Tax |
3%
|
| VAT |
| - on under declaration |
6.5%
|
| - on official errors |
3%
|
| These rates are effective from 17
February 2003 |
|
National Insurance Contributions
| Class 1 Employed. From 6
April 2003 |
|
Ј(GBP) pw earnings
|
Contracted in
|
Contracted out
|
Contracted out
|
| Employee |
|
(salary related)
|
(money purchase)
|
| Up to Ј(GBP)89.00 |
nil
|
nil
|
nil
|
| Ј(GBP)89.01 - Ј(GBP)595.00 |
11%
|
9.4%
|
9.4%
|
| over Ј(GBP)595.00 |
1%
|
1%
|
1%
|
| Employer |
| Earnings bracket |
| Up to Ј(GBP)89.00 |
nil
|
nil
|
nil
|
| Ј(GBP)89.01 - Ј(GBP)595.00 |
12.8%
|
9.3%
|
11.8%
|
| Over Ј(GBP)595.00 |
12.8%
|
12.8%
|
12.8%
|
| |
| Class 2 Self-employed: |
| Weekly rate Ј(GBP)2.00 once earnings
over Ј(GBP)4,095 p.a. |
| |
| Class 3 Voluntary: |
| Weekly rate Ј(GBP)6.95 |
| |
| Class 4 Self-emloyed: |
| 8% on annual profits between Ј(GBP)4,615
- Ј(GBP)30,940 |
| 1% on annual profits above Ј(GBP)30,940 |
|
Personal Pensions
| |
Contribution limit - 0% of net relevant
earnings |
| Age on 6 April 2003 |
PPS |
RAP* |
| 35 or less |
17.5 |
17.5 |
| 36-45 |
20.0 |
17.5 |
| 46-50 |
25.0 |
17.5 |
| 51-55 |
30.0 |
20.0 |
| 56-60 |
35.0 |
22.5 |
| 61 and over |
40.0 |
27.5 |
| N.R.E. cap for P.P.S.
Ј(GBP)99,000 (2002/03: Ј(GBP)97,200). |
| *Retirement annuity policy
limits apply to policies effected before 1 July 1988. |
| Stakeholder pensions
allow individuals to contribute up to Ј(GBP)3,600 per
annum irrespective of earnings or age. |
|
Stamp Duty
| Transfers of property |
| Value of property |
From 28.3.2000 |
| |
Rate |
| Ј(GBP) |
% |
| 1-60,000 |
nil |
| 60,001-250,000 |
1 |
| 250,001-500,000 |
3 |
| Over 500,000 |
4 |
|
|
|
