≡ Menu

Tax Rates 2011/12

The current tax rates and allowances for the 2011-12 tax year are as follows:

Corporation Tax

  • 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.

Income Tax

  • 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.

Dividend Tax

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.

Top Articles

Do I need an accountant for my limited company?
Find out what a limited company accountant could do for you.

Mortgages for limited company directors and contractors Are you self-employed and looking at getting a mortgage?

How much limited company tax do I have to pay? Find out the latest tax information for limited company owners.

Company Bug Newsletter

Keep up to date with small business news and guides by signing up to the Company Bug newsletter.