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Income Tax
| Tax rates |
Note |
2007/08 |
2006/07 |
2005/06 |
| Starting rate band to |
£2,230 |
£2,150 |
£2,090 |
| Tax rate |
10% |
10% |
10% |
| Basic rate band - next |
£32,370 |
£31,150 |
£30,310 |
| Normal rate |
22% |
22% |
22% |
| Savings income rate |
20% |
20% |
20% |
| UK dividend income rate |
10% |
10% |
10% |
| Higher rate - taxable income over |
£34,600 |
£33,300 |
£32,400 |
| Normal rate |
40% |
40% |
40% |
| UK dividend income rate |
32.5% |
32.5% |
32.5% |
| Allowances that Reduce Taxable Income |
| Personal allowance |
under 65 |
1 |
£5,225 |
£5,035 |
£4,895 |
| |
65 to 74 |
1,3 |
£7,550 |
£7,280 |
£7,090 |
| |
75 and over |
1,3 |
£7,690 |
£7,420 |
£7,220 |
| Allowances that reduce tax |
| Married couple's allowance |
|
|
|
| Tax reduction |
72 to 74 |
1,2,3 |
£628.50 |
£606.50 |
£590.50 |
| |
75 and over |
1,2,3 |
£636.50 |
£613.50 |
£597.50 |
| The age-related allowances are progressively withdrawn if income exceeds |
£20,900 |
£20,100 |
£19,500 |
| Minimum PA |
£5,225 |
£5,035 |
£4,895 |
| Venture Capital Trusts max. |
£200,000 |
£200,000 |
£200,000 |
| Enterprise Investment Scheme max. |
£400,000 |
£400,000 |
£200,000 |
| Rent a Room - exempt on gross annual rent up to |
£4,250 |
£4,250 |
£4,250 |
| Construction Industry Scheme deduction rate |
18% |
18% |
18% |
Notes
- Ages are as the end of the tax year. Ages for the married couples allowance relate to the elder of husband or wife.
- The married couple's allowance is available only to those
couples where at least one spouse was born before 6 April
1935.
- The higher rates of personal allowances are reduced by
£1 for each £2 of excess income over £20,900
until the basic allowance is reached.
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