The current tax rates and allowances for the 2011-12 tax year are as follows:
- The ‘small profits’ rate paid on profits up to £300,000 is 20%.
- Find out more in our Corporation Tax guide.
Value Added Tax
- The standard VAT rate is 20%.
- The percentage rate used by contractors on the Flat Rate VAT Scheme is 14.5% (or 13.5% for your first year on the scheme).
- The registration threshold for VAT is £73,000.
- Find out more in our VAT guide.
- The Personal Allowance is £7,475.
- The value of this allowance is eroded by £1 for each £2 above £100,000.
Income Tax- Bands
- 20% rate applies between £0 and £35,000.
- 40% rate applies between £35,001 and £150,000.
- 50% rate applies on income above £150,000.
National Insurance Contributions (NICs)
- The employers’ Class 1 NIC rate is 13.8% on earnings above £139/week.
- The employee’s NIC rate is 12% of earnings between £139 and £817/week, and 2% on earnings above £817/week.
- Find out more in our National Insurance guide.
The tax rates on dividends remains unchanged for the 2011/12 tax year:
- 10% for dividend income up to the £35,000 threshold.
- 32.5% for higher rate income between £35,001 and £150,000.
- 42.5% for additional rate income over £150,000
- Find out more in our Dividend Tax guide.
Tax Relief on Pensions
- The lifetime allowance is £1.8m (allowance will be cut to £1.5m in 2012/13).
- The annual allowance is £50,000.
Capital Gains Tax
- The CGT rate for individuals is 18% (basic rate), and 28% (higher rate).
- The Entrepreneurs’ Relief lifetime allowance limit is £10m.
Inheritance Tax (IHT)
- The IHT threshold is £325,000. Beyond this limit, you pay 40%.
Individual Savings Accounts (ISAs)
- The ISA limit is £10,680, £5,340 of which can be saved in cash.
Approved Mileage Allowance Payments (AMAPs)
- The standard rate is 45p for the first 10,000 miles, and 25p thereafter.