Tax Rates & Allowances 2006/07
*
 Authorised mileage rates
*
 ISAs
*
*
 National insurance
*
 Capital gains tax
*
 Pension premiums
*
 Car & fuel benefits
*
 Social security benefits
*
 Corporation tax
*
 Stamp duty
*
 Income tax rates
*
 Tax Credits
*
*
 VAT
*
 Inheritance tax
*
 VAT Fuel Scale Charges

Authorised Mileage Rates:
Cars up to 10,000 miles - 40p
  over 10,000 miles - 25p
Bicycles: 20p
Motorcycles: 24p


These rates represent the maximum tax-free mileage allowances for employees using their own vehicles for business. Any excess is taxable. If the employee receives less than the statutory rate, tax relief can be claimed on the difference.

 

Capital Allowances:
Writing Down Allowance

Plant and machinery*

25% # reducing balance

Motor cars

25% reducing balance (£3,000 max)

Industrial buildings

4% (straight line)

Agricultural buildings

4% (straight line)

Hotels

4% (straight line)


*For small businesses: first year allowances (FYAs) of 50% for 12 months from 6.4.06 (1.4.06 for companies). 40% otherwise.

For medium-sized businesses: FYAs of 40%.

For all businesses: 100% FYAs on expenditure on energy saving plant and machinery.

**100% FYAs on new cars with CO2 emissions not exceeding 120 gm/km until 31.3.08.

# 6% on certain life long assets.

 

Capital Gains Tax:
2006/07
2005/06
Individuals - exemption
£8,800
£8,500
Balance of gains (reduced by taper relief) charged as top slice of income (at savings rates - ie 10%, 20% or 40%)
Trusts - exemption
£4,400
£4,250
- balance of gains (reduced by taper relief)
40%
40%

Taper relief 2006/07 and 2005/06 disposals
Percentage relief depends on number of complete years asset owned after 5.4.98.
Years of ownership
1
2
3
4
5
6
7
8
9
10
Business assets (% relief)
50
75
75
75
75
75
75
75
75
75
Non-business assets* (% relief)
0
0
5
10
15
20
25
30
35
40

*Add one extra year if asset owned before 17.3.98.

 

Car & Fuel Benefits:
Company cars 2006/07
CO2 emissions (gm/km) (round down to nearest 5gm/km) % of car’s list price taxed Fuel benefit (£14,400 x %)
up to
140		 15 2,160
145 16 2,304
150 17 2,448
155 18 2,592
160 19 2,736
165 20 2,880
170 21 3,024
175 22 3,168
180 23 3,312
185 24 3,456
190 25 3,600
195 26 3,744
200 27 3,888
205 28 4,032
210 29 4,176
215 30 4,320
220 31 4,464
225 32 4,608
230 33 4,752
235 34 4,896
240
and above		 35 5,040

Company cars
  • For diesel cars add a 3% supplement, but maximum still 35%. This is waived for Euro IV diesels. For 2006/07, no waiver for diesels registered on/after 1 January 2006.
  • Discounts apply to certain environmentally friendly cars.
  • For cars registered before 1.1.98 charge is based on engine size.
  • The list price includes accessories and is subject to an upper limit of £80,000.
  • List price is reduced for capital contributions made by the employee up to £5,000.

Fuel benefits

  • The fuel benefit charge is proportionately reduced if provision of private fuel ceases part way through the year.
  • The fuel benefit is reduced to nil only if the employee pays for all private fuel.

Van benefit per vehicle - 2006/07 and 2005/06

Vehicles under 4 years old
£500		 Vehicles at least 4 years old
£350

Notes

  1. The charge only applies if there is unrestricted private use of the van.
  2. Van benefits include fuel for private use.

 

Corporation Tax:

Years to 31.3.07
Years to 31.3.06
Profits Band
£
Rate
%
Profits Band
£
Rate
%
Starting rate
N/a
N/a
0 - 10,000
0*
Marginal (starting) rate
N/a
N/a
10,001 - 50,000
23.75
Small companies rate
0 - 300,000
19
50,001 - 300,000
19
Marginal (small companies) rate
300,001 - 1,500,000
32.75
300,001 - 1,500,000
32.75
Full rate
Over 1,500,000
30
Over 1,500,000
30
Starting rate fraction
N/a
19/400
Small companies fraction
11/400
11/400


*Minimum rate of 19% applies when profits are distributed to non-company shareholders.

The profits limits are reduced for accounting periods of less than 12 months and for a company with associated companies.

 

Income Tax Rates:
2006/07
2005/06
Band
£
Rate
%
 Band
£
Rate
%
0 - 2,150
10
 0 - 2,090
10
2,151 - 33,3000
22 *
 2,091 - 32,400
22 *
Over 33,300
40 **
 Over 32,400
40 **

* Except dividends (10%) and savings income (20%).

** Except dividends (32.5%).

Other income taxed first, then savings income and finally dividends.

 

Income Tax Reliefs:
2006/07
£
2005/06
£
Personal allowance - under 65
5,035
4,895
- 65 - 74 *
7,280
7,090
- 75 and over *
7,420
7,220
Married
couple's
allowance
(relief at 10%)		 - aged less than 75 and born before 6.4.35 *

6,065

5,905
- 75 and over*
6,135
5,975
- min. amount
2,350
2,280
* Age allowance income limit
20,100
19,500
(reduce age allowance by £1 for every £2 of excess income over £20,100)
Blind person’s allowance
1,660
1,610

Inheritance Tax:
Chargeable Transfers
Death Rate
%
Lifetime Rate
%
2006/07
£’000
2005/06
£’000
Nil
Nil
0 - 285
0 - 275
40
20
Over 285
Over 275

Reliefs:
Annual exemption £3,000 Marriage - parent £5,000
Small gifts £250   - grandparent £2,500
  - bride/groom £2,500
  - other £1,000

Reduced charge on gifts within seven years of death:
Years before death
0-3
3-4
4-5
5-6
6-7
% of death charge
100
80
60
40
20

 

ISAs:
2006/07
£
Overall investment limit
- maxi ISA
7,000
- mini ISA
- stocks, shares and life insurance
4,000
- cash
3,000

 

National Insurance:
Class 1 (employed)
Contracted in		 2006/07 Rates
Weekly earnings
Employer
Employee
Up to £97
Nil*
Nil*
£97.01 - £645
12.8%**
11%**
Over £645
12.8%**
£60.28 +1%†
* Entitlement to contribution-based benefits retained for earnings between £84.01 and £97 per week.

** On earnings above £97.

† On earnings above £645.

Class 1A (employers) 12.8% on employee taxable benefits
Class 1B (employers) 12.8% on PAYE Settlement Agreements
Class 2 (self-employed) flat rate per week £2.10
small earnings exception p.a. £4,465
Class 3 (voluntary) flat rate per week £7.55
Class 4 (self-employed) 8% on profits between £5,035 and £33,540 plus 1% on profits over £33,540

 

Pension Premiums:

  • Tax relief available for personal contributions: higher of £3,600 (gross) or 100% of relevant earnings

  • Employers will obtain tax relief on employer contributions if they are paid and made 'wholly and exclusively'. Tax relief for large contributions may be spread over several years.

  • Any contributions in excess of £215,000, whether personal or by the employer, will be subject to income tax on the individual at 40%.

  • No carry back of pensions contributions.

 

Social Security Benefits:

Weekly Benefit
2006/07
2005/06
Basic retirement pension - single person
£84.25
£82.05
- married couple
£134.75
£131.20
Statutory pay rates - average weekly earnings £84 (£82) or over
Statutory Sick Pay
£70.05
£68.20
Statutory Maternity Pay
- first six weeks
90% of weekly earnings
- next 20 weeks
£108.85*
£106.00*
Statutory Paternity Pay - two weeks
£108.85*
£106.00*
Statutory Adoption Pay - 26 weeks
£108.85*
£106.00*
* Or 90% of weekly earnings if lower

 

Stamp Duty:

Land and buildings (On full consideration paid)

Rate
Residential property
Non-residential
Disadvantaged areas
£
Other
£

£
Nil
0 - 150,000
0 - 125,000*
0 - 150,000
1%
150,001 - 250,000
125,001 - 250,000
150,001 - 250,000
3%
250,001 - 500,000
250,001 - 500,000
250,001 - 500,000
4%
Over 500,000
Over 500,000
Over 500,000

*Limit raised to £125,000 (£120,000) from 23 March 2006.

Shares and securities - rate remains unchanged at 0.5%

Tax Credits:

2006/07
£
2005/06
£
Working Tax Credit (WTC)
Basic element - max.
1,665
1,620
Childcare element
80% (70%) of eligible costs up to £175 (£175) per week (£300 (£300) if two or more children)
Child Tax Credit (CTC)
Child element per child - max.
1,765
1,690
Family element
545
545
Baby addition
545
545

Reductions in maximum rates 37% of income above £5,220*p.a.

*If only CTC is claimed, the threshold is £14,155 p.a. (£13,910). The family element of CTC is not reduced unless income is more than £50,000 p.a. when it is reduced by £1 for every £15 of additional income.

 

VAT:
Standard Rate 17.5%
Reduced Rate 5%
Annual Registration Limit - from 1.4.06
(1.4.05 - 31.3.06 £60,000)		 £61,000
Annual Deregistration Limit - from 1.4.06
(1.4.05 - 31.3.06 £58,000)		 £59,000

VAT on private fuel - scale charge due per quarter per car for accounting periods beginning on or after 1 May 2006.

Petrol
Diesel
Charge
£
VAT
£
Charge
£
VAT
£
Up to 1400cc
273
40.66
260
38.72
1401 - 2000cc
346
51.53
260
38.72
Over 2000cc
508
75.66
331
49.30



VAT Fuel Scale Charges:

Periods commencing from 1 May 2007

The output VAT charge payable by VAT registered businesses which allow their employees to claim all the fuel expenses on their company cars and reclaim VAT on the full amount of fuel purchased without making an adjustment for private use.

For periods commencing from 1 May 2007 the fuel scale charges are calculated on the basis of the car's carbon dioxide emissions.

The fuel scale charge for a 3 month period is detailed below:

CO2 band

VAT fuel scale charge,
3 month period 
£

VAT on
3 month charge
£

VAT exclusive
3 month charge
£

140 or below

182.00

27.11

154.89

145

195.00

29.04

165.96

150

207.00

30.83

176.17

155

219.00

32.62

186.38

160

231.00

34.40

196.60

165

243.00

36.19

206.81

170

256.00

38.13

217.87

175

268.00

39.91

228.09

180

280.00

41.70

238.30

185

292.00

43.49

248.51

190

304.00

45.28

258.72

195

317.00

47.21

269.79

200

329.00

49.00

280.00

205

341.00

50.79

290.21

210

353.00

52.27

300.43

215

365.00

54.36

310.64

220

378.00

56.30

321.70

225

390.00

58.09

331.91

230

402.00

59.87

342.13

235

414.00

61.66

352.34

240 or above

426.00

63.45

362.55

For monthly or annual VAT return periods separate tables are available. Please use the following link http://www.hmrc.gov.uk/budget2007/bn55.htm

 
 
© 2004 Dean Statham. All rights reserved