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Tax
Rates & Allowances 2009-10
Value
Added Tax
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| VAT
rates |
| VAT
is due on supplies of goods or services which are made in the
UK by a person who is registered or is required to be registered
for VAT, & also on the importation & cross border acquisition
of goods & some services. |
|
If
the suplly does not fall into the above description, it is likely
to be outside the scope of UK VAT. Otherwise all other supllies,
unless specifically exempted, are referred to as being taxable
supplies & are subject to one of thress rates of VAT.
The three rates of VAT are:
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the
standard rate (17.5%)
the zero rate (0%); and
the reduced rate (5%) on a limited range of goods & services
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| The
standard rate of VAT applies to all taxable supplies which are
not charged at the zero rate or the reduced rate of VAT. |
| VAT
incurred on the purchase of goods & services by a taxable
person for use in making taxable supplies (input VAT) is generally
recoverable. |
| The
final category covers exempt supplies, which are specifically
excluded from being subject to any VAT charge but do not confer
and right of recovery of input tax. |
| Registration
& Deregistration |
| Any
person is liable to register for VAT if the combined value of
its taxable supplies in the UK exceeded the registration threshold
in the preceeding 12 months, or if there are reasonable grounds
for believing that the value of taxable supplies to be made in
the next 30 days will exceed the registration threshold. |
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The
current registration threshold is £68,000
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| The
current deregistration threshold is £66,000 |
| Business
with taxable turnover below the registration thresholds may apply
to be registered on a voluntary basis. |
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National
Insurance
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Class
1 (employed) - benefits-in-kind
Payable annually in arrears by 19 July following the year of
assessment.
Employers are liable to Class 1A NICs on alomost all benefits-in-kind
provided to company directors & to employees earning at
a rate of £8,500 p.a or more when the benefits are not
already liable to Class 1. Calculations are generally calculated
ate the full Class 1 rate currently 12.8%
Class 1B (employed) - PAYE Settlement Agreements (PSAs)
A PSA is a statutory arrangement under which employers can settle
employees' income tax liability on sundry benefits.
Employers are generally liable to Class 1B NICs on items included
in the PSA & the amount of tax payable by the employer under
the PSA. For items provided during 2009/10 & the tax payable
thereon, the liability is calculated at 12.8%.
Class 1B NICs are payable by 19 October after the tax year.
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Class
2 (self employed)
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2009/10
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2010/11
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| Payable
quarterly or by monthlydirect debit |
| Flat
rate, per week |
£2.40
|
£2.40
|
| Small
earnings exception per annum |
£5,075
|
£5,075
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| Special
Class 2 |
| Flat
rate, per week |
£4.75
|
£4.50
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| Small
earnings exception per annum |
£5,075
|
£5,075
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| Class 3 (voluntary) |
| Flat
rate, per week |
£12.05
|
£12.05
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| Class
4* (self employed) |
|
On profits |
£5,715
- £43,875
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8%
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Excess
over £43,875
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1%
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| *
Payable with Schedule D income tax |
Capital
Gains Tax
|
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2009-10
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2010-11
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| Taxed
* |
18%
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18%
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| Annual
exemption |
- individual |
£10,100
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£10,100
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- settlement(s) |
£5,050
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£5,050
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| Transfers
between spouses and civil partners living together are exempt. |
| *Entrepreneur's
relief gives a lifetime allowance of £1m on disposals of
trading businesses and shares in trading companies, giving an
effective rate of tax at 10%. Gains in excess of this amount will
suffer tax at 18%. There is a minimum qualifying period of ownership
of 1 year. |
| Inheritance
Tax |
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2009-10
|
2010-11
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| Nil
rate band |
£325,000
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£325,000
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These rates also apply to lifetime chargeable transfers made
within 3 years preceding death.
Tapered rates apply to lifetime chargeable transfers (inc PETS)
made more than 3 years but within 7 years preceding death. Tapering
reduces the tax rate, not the chargeable transfer, & so
is of no benefit to a transfer within the nil rate band. The
effective rates of tax on the excess over the nil rate band
are:
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| 0 to 3 years before death |
40% |
| 3 to 4 years before death |
32% |
| 4 to 5 years before death |
24% |
| 5 to 6 years before death |
16% |
| 6 to 7 years before death |
8% |
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| From
deaths after 8 October 2007, a deceased can utilise all or part
of an unused nil rate band (NRB) of their previously-deceased
spouse or civil partner. If on the first death, a proportion of
the then NRB was not utilised by that deceased, the unused proportion,
applied to the NRB at the time of the second death, is available. |
| The
nil rate band is scheduled to rise to £350,000 for 2010/11
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| Main
Exemptions |
- Most
transfers between spouses and civil partners.
- The
first £3,000 of lifetime transfers in any tax year plus
any unused balance from the previous year.
- Gifts
of up to but not exceeding £250 p.a. to any number of
persons.
- Gifts
made out of income that form part of normal expenditure and
do not reduce the standard of living.
- Gifts
in consideration of marriage to bride and/or groom of up to
£5,000 by a parent, £2,500 by a grandparent, or
£1,000 by any other person
- Gifts
to charities, whether made during lifetime or death
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Tax Rates & Allowances Continue >
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