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Rates and Allowances – Income Tax

Income Tax allowances

2006-07 (£) 2007-08 (£)

Personal allowance

5,035 5,225
Personal allowance for people aged 65-74 7,280 7,550
Personal allowance for people aged 75 and over 7,420 7,690
Income limit for age-related allowances 20,100 20,900
Married couples allowance (aged < 75 born before 6/4/35) 6,065 6,285
Married couple’s allowance (aged 75 and over) 6,135 6,365
Minimum amount of married couple’s allowance 2,350 2,440
Blind person’s allowance 1,660 1,730
Tax relief for the married couples allowance = 10%
Taxable Bands 2005-06 (£) 2006-07 (£) 2007-08 (£)
Starting rate 10% 0 – 2,090 0 – 2,150 0 - 2,230
Basic rate 22% 2,091 –32,400 2,151 – 33,300 2,231 - 34,600
Higher Rate 40% over 32,400 over 33,300 over 34,600
Approved mileage rates pence per mile 2006-07 2007-08
Up to 1,000 c.c. 40p/25p 40p/25p

1,001-1,500 c.c.

40p/25p 40p/25p
1,501-2,000 c.c. 40p/25p 40p/25p
Over 2,000 c.c. 40p/25p 40p/25p
Where 40 per mile for first 10,000 miles and excess @ 25p per mile
Rates and Allowances – National Insurance Contributions
£ per week 2006-07 2007-08
Lower earnings limit primary class 1 £84 £87
Upper earnings limit primary class 1 £645 £670
Primary threshold £97 £100
Secondary threshold £97 £100
Employees primary class 1 rate between primary threshold & Upper earnings limit 11% 11%
Employees primary class 1 rate above upper earnings limit 1% 1%
Employees contracted-out rebate 1.6% 3.7%
Married women’s reduced rate between primary threshold & Upper earnings limit 4.85% 4.85%
Married women’s rate above upper earnings limit 1% 1%
Employers secondary class 1 rate above secondary threshold 12.8% 12.8%
Employers contracted-out rebate, salary related schemes 3.5% 3.5%
Employers contracted-out rebate, money purchase scheme 1% 1.4%
Class 2 rate £2.10 £2.20
Class 2 small earnings exception £4,465 per year £4,635 per year
Class 3 rate £7.55 £7.80
Class 4 lower profits limit £5,035 per year £5,225 per year
Class 4 upper profits limit £33,540 per year £34,840 per year
Class 4 rate between lower profits limit & upper profits limit 8% 8%
Class 4 rate above upper profits limit 1% 1%
VAT 2006-07 2007-08
Standard rate 17.5% 17.5%
VAT fraction 7/47 7/47
Registration limit £61,000 -
Deregistration limit £59,000 -
Cash accounting £660,000* -
*£825,000 if already using it (2002/03 – 2003/04 £750,000)

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