Rates & Allowances 2009/2010

For information on this tax years rates and allowances please use the links on the right.

Key Tax Dates for this Financial Year

Income Tax and Class 4 NIC

• 31 July 2009 - 2008/09 2nd payment on account
• 31 Jan 2010 - 2008/09 balancing payment and 2009/10 1st payment on account
• 31 July 2010 - 2009/10 2nd payment on account
• 31 Jan 2011 - 2009/10 balancing payment and 2010/11 1st payment on account

Tax Return

• 31 October 2009 - Filing deadline for 2009 paper return
• 31 January 2010 - Filing deadline for 2009 online return

Capital Gains Tax

• 31 January 2010 - 2008/09 CGT payment due
• 31 January 2011 - 2009/10 CGT payment due

Inheritance Tax

• Payment due 6 months after the end of the month of death or chargeable transfer.
• For chargeable lifetime transfers from 6 April to 30 September, payment is due by 30 April in the following tax year.

Corporation Tax

• Payment due 9 months and one day after the end of the accounting period. Accounts longer than 12 months are divided into two periods.

2008/09 PAYE Return Deadlines

• 19 May 2009 - P35, P14, P38, P38A and CIS36
• 31 May 2009 - P60s to employees
• 6 July 2009 - P11D, P11Db and P9D - and give copies to employees19 July 2009 - Payment of Class 1A National Insurance on Benefits due

Income Tax Bands & Rates

* Only applies to savings income
** Dividends taxed at 10%
*** Dividends taxed at 32.5% of the gross dividend

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

It is proposed that for 2010/11 there will be a higher rate of income tax of 50% for taxable savings and non-savings income over £150,000.
Dividend income above this level will then be taxed at 42.5%.

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Income Tax Allowances

* These allowances are reduced where the income is above the income limit but will never be less than the personal allowance or minimum amount of married couple's allowance.

For 2010/11 the personal allowance will be reduced for individuals with a gross income before the allowance of £100,000. The allowance will be reduced by £1 for every £2 of gross income above the income limit up to a maximum reduction down to zero.

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Tax Credits & Child Benefit

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Pension Premiums

• Maximum amount of pension contributions that qualify for tax relief is the greater of £3,600 or the individuals UK relevant earnings.
• Depending on whether the contributions had tax relief in the first place, contributions in excess of £245,000 (was £235,000 for 2008/09) can give rise to a tax charge of 40% on the excess.
• Employer contributions need to be "wholly and exclusively" for the benefit of the trade to obtain tax relief.
• Minimum age for taking benefits is 50.
• Maximum age for tax relief on contributions is 74.
• Lifetime allowance is £1,750,000 (was £1,650,000 for 2008/09).
• There is a tax charge of up to 55% on the excess value of the pension fund used to provide benefits if they exceed the lifetime allowance.
• Maximum tax-free lump sum is 25%.

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Individual Savings Accounts

*From 6 October 2009 for anyone aged 50 and over. For 2010/11 the increased limits will apply to everyone.

Savings are exempt from income tax and capital gains tax.

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Car And Fuel Benefits

To find out the CO2 figure for your car, you can...

• visit the Vehicle Certification Agency www.vca.gov.uk
• inspect the car's V5 registration document
• ask your dealer
• look at the data pages of car magazines
  

For cars registered from 1 January 1998 with no CO2 emissions figures, the tax charge is 15% of the list price for engines up to 1,400 cc, 22% for engines of 1,401 cc to 2,000 cc and 32% for engines above 2,000 cc.

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.

Employee contributions reduce the taxable benefit by the amount paid
There are various discounts on the percentages for cars driven on alternative fuels.
It is proposed that from 2010/11 the thresholds will be reduced by 5g/km and for 2011/12 by a further 5g/km plus the £80,000 upper limit will be scrapped.

Fuel Benefits

The car fuel benefit is calculated by applying the above car benefit percentage to a figure of £16,900.
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 Benefits

2009/10 and 2008/09
The taxable benefit for private use of a company van that is more than home to work travel is £3,000.
The taxable benefit for fuel provided for private use is £500.

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Tax Free Mileage Allowances

These rates represent the maximum tax-free mileage allowances for employees using their own vehicles for business. Any excess is taxable. If the employee receives less than the statutory rate, tax relief can be claimed on the difference.

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Capital Gains Tax

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

** Entrepreneurs' relief is available on the first £1 million of qualifying lifetime gains on or after 6th April 2008.

Transfers between husband and wife or civil partners living together are exempt.

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Corporation Tax

The profits limits are reduced for accounting periods of less than 12 months and for a company with associated companies.
It has also been announced the small companies rate will rise to 22% in the year to 31/3/2011.

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Stamp Duty

Stamp Duty Land Tax
The applicable rate of Stamp Duty Land Tax must be applied to the whole of the consideration paid to acquire the land / buildings.

For disadvantaged areas, sales of land and buildings up to £150,000 are exempt.

Zero Carbon Homes
From 1 October 2007 until 30 September 2012 all new zero carbon homes and flats costing up to £500,000 are exempt from stamp duty land tax. Homes and flats above this will have the first £500,000 exempt. This only applies to new homes which have SDLT on the first sale.

New leases (lease duty)
Duty on rent

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 on non-residential properties where the rent exceeds £1000 annually).

Stamp Tax

The rate of stamp duty / stamp duty reserve tax for the transfer of shares and securities is at 0.5% for 2008-09. Where the consideration is £1000 or less on the transfer of shares, they will be exempt from stamp duty.

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Inheritance Tax

The threshold for 2010-11 has already been announced at £350,000

For deaths after 9th October 2007, a transfer of any unused nil rate band is available from former deceased spouses and civil partners.

Amounts above the threshold are taxed at 40%.
Most transfers between spouses and civil partners are exempt.
Chargeable lifetime transfers are initially charged at 20%.

Business Property Relief

Business, interest in business or qualifying shareholders in unquoted companies (includes AIM listed companies) - 100%
Land, buildings, machinery, or plant used in a company controlled by the transferor - 50%
Agricultural property - 50% or 100%

Other Reliefs:

• Annual gifts of up to £3000 per donor are exempt.
• Small gifts £250
• Marriage gifts...
  - parent £5,000
  - grandparent £2,500
  - bride/groom £2,500
  - other £1,000

Reduced charge on gifts made within seven years of death:

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National Insurance

It is proposed that from 2011/12, national insurance rates for employees and employers and class 4 contributions for the self-employed will rise by 0.5%.
This also applies to both Class 1A and Class 1B contributions. From 2011/12 the primary threshold for NI will be aligned with the income tax single persons allowance.

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Social Security Benefits

* Or 90% of weekly earnings if this is lower

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Value Added Tax

For further information on the vat rate change and how to deal with it, HMRC have released a detailed guide to the vat rate change.

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Capital Allowances

Capital allowances write off the cost of capital assets against taxable profits. They are used instead of the depreciation in the accounts, which is not allowable as a tax deduction.

(1) For accounting periods shorter or longer than 1 year the £50,000 limit is pro-rata. There is a single £50,000 AIA limit for groups of companies and there is "anti-fragmentation" rules for "related" companies and businesses under common control. The AIA limit can be allocated between companies as they wish.

(2) There are transitional premiums for a "hybrid rate" where the accounting period spans the commencement date for the new regime.

(3) Historic WDA plant and machinery pools can claim a WDA of up to £1,000 where the pool is £1,000 or less.

(4) Companies that make losses attributable to 100% first year allowances on designated energy saving or environmentally beneficial plant and machinery can surrender the loss in exchange for the first year tax credit equal to 19% of the loss surrendered subject to a maximum of the greater of £250,000 or the company's total PAYE and NIC liability for the period concerned.

(5) The distinction between cars that cost more and less than £12,000 will end on 1 April 2009 for companies and 6 April 2009 for unincorporated businesses. From this date cars will be put into one of two general plant pools, those over 160g/km added to a special rate 10% pool and those at or below 160gm/km will go into the main plant pool. Cars with private usage will still be held in individual pools but the rate determined by these criteria. For expenditure on cars before April 2009, there is a 5 year transitional period where they will continue to be subject to the existing expensive car rules. Prior to these dates there was a 20% writing down allowance subject to a maximum of £3000p.a.

(6) Industrial buildings and Agricultural buildings allowances are being phased out by 2010/11.

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