Income tax

Income tax - 25 March 2010

Tax bands and rates		2010/11	2009/10
Basic rate band		£37,400	£37,400
Basic tax rate		20%	20%
Dividend ordinary rate		10%	10%
Savings rate band		£2,440	£2,440
Savings rate		10%	10%
Higher rate band		£37,401 - £150,000	Over £37,400
Higher tax rate		40%	40%
Dividend higher tax rate		32.5%	32.5%
Additional rate band		Over £150,000	N/A
Additional tax rate		50%	N/A
Dividend additional tax rate		42.5%	N/A
Allowances that reduce taxable income
Personal allowances	under 65	£6,475	£6,475
	65 to 74	£9,490	£9,490
	75 and over	£9,640	£9,640
Blind person's allowance		£1,890	£1,890
Age related allowances are reduced by £1 for each £2 of income above £22,900 (2009/10 £22,900), until the minimum of £6,475 (2009/10 £6,475) is reached. The minimum personal allowance is reduced, by £1 for each £2 of income from £100,000 to £112,950.
Allowances that reduce tax
Married couple's allowance (MCA)	75 and over	£6,965	£6,965
Tax reduction at 10%		£696.50	£696.50
The age for MCA is of the elder spouse or civil partner. The loss of tax reduction is 10p for each £2 of income above £22,900 (2009/10 £22,900) until the minimum of £267 (2009/10 £267) is reached. All ages as at 5 April 2011
Non domicile charge Charge for adult non UK domiciliary - applies after UK residence in seven or more of the previous tax years		£30,000	£30,000
Tax Shelters
Enterprise Investment Scheme (EIS) up to		£500,000	£500,000
Maximum amount for EIS carry back		£50,000	£50,000
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 rate - registered		20%	20%
Higher rate - not registered		30%	30%

Did you know?

The revenue the Government are budgeting to generate from income tax this tax year amounts to £144 billion (2009/10 - £140 billion).

Income tax

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