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In This Section : Tax Tables 08/09 | Income Tax | Capital Gains Tax | Corporation Tax | Main Capital Allowances | Value Added Tax | Inheritance Tax | Vehicle Benefits | Mileage Allowance | NI Contributions | Key Dates | Pension Premiums | Charitable Giving | Savings | Useful Rates | Stamp Rates

Income Tax

Tax rates Note 2008/09 2007/08 Starting rate band * see below £2,230   Tax rate N/A 10% Basic rate band £36,000 £32,370   Basic rate 20% 22%   Savings rate * see below 20%   Dividend ordinary rate 10% 10% Higher rate - taxable income over £36,000 £34,600   Higher tax rate 40% 40%   Dividend upper rate 32.5% 32.5% * 10% starting rate for savings income up to £2,320. Not applicable if taxable non-savings income exceeds £2,320.     Trusts     For interest in possession trusts on all income, and other trusts on the first £1,000 of income ("standard rate band"):     dividend ordinary rate 4 10% 10% savings income 4 20% 20% other income 4 20% 22% Income of other trusts above £1,000 is taxed at the special trust rates:     rate applicable to trusts   40% 40% dividend trust rate   32.5% 32.5% Allowances that reduce taxable income     Personal allowance (PA) under 65 1 £5,435 £5,225   65 to 74 1,3 £9,030 £7,550   75 and over 1,3 £9,180 £7,690   Blind person's allowance   £1,800 £1,730 Allowances that reduce tax     Married couple's allowance (MCA)       Tax reduction 74 1,2,3 £653.50 £628.50   75 and over 1,2,3 £662.50 £636.50 The age-related allowances are progressively withdrawn if income exceeds £21,800 £20,900 Minimum PA £5,435 £5,225 Minimum MCA tax reduction £254 £244 Tax Shelters     Enterprise Investment Scheme (EIS) up to 5 £500,000 £400,000 Venture Capital Trust (VCT) up to £200,000 £200,000 Golden Handshake max. £30,000 £30,000 Rent a Room - exempt on gross annual rent up to £4,250 £4,250 Construction Industry Scheme deduction rate:     Standard (registered) 20% 20% Higher (not registered) 30% 30%

Notes

1. Ages are as the end of the tax year. Ages for the MCA relate to the elder of spouse or civil partner
2. MCA is available only to those couples where at least one spouse or civil partner was born before 6 April 1935.
3. The higher rates of personal allowances are reduced by £1 for each £2 of excess income over £21,800 (2007/08 £20,900) until the basic allowance is reached. Similar limits apply to the married couple's allowance: the loss of tax reduction is 10p for each £2 of excess income until the minimum of £254 (2007/08 £244) is reached. (For couples married before 5 December 2005, only the husband's income is taken into account. For those married on or after 5 December 2005 or in a civil partnership, only the higher earner’s income is taken into account).
4. Where there are several trusts created by the same settlor, the "standard rate band" is divided equally between them, subject to a minimum band of £200 for each trust.
5. Start date for 2008/09 increase is subject to European Commission approval.