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Income tax and capital gains tax rates
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2012/13 |
2011/12 |
| Basic rate band |
£34,370 |
£35,000 |
| Higher rate band |
£34,371 to £150,000 |
£35,001 to £150,000 |
| Additional rate on income over |
£150,000 |
£150,000 |
If taxable general income is less than £2,710 (2011/12: £2,560), savings income is taxed at a ‘starting rate’ of 10% until total taxable income exceeds that limit. This ‘starting rate band’ is part of the BRB.
Rates differ for
|
General |
Savings |
Dividend |
| Basic |
20% |
20% |
10% |
| Higher |
40% |
40% |
32.5% |
| Additional |
50% |
50% |
42.5% |
Allocation of rate bands
Taxable income uses up the rate bands in the following order:
- 'general income' (employment, business profits, rent)
- 'savings income' (mainly interest)
- 'dividends' (mainly distributions from companies)
Extension of basic and higher rate bands
A taxpayer who pays personal (including stakeholder) pension policy premiums, or gives cash to charity under the Gift Aid scheme,
increases the basic and higher rate band by the grossed up equivalent of the payment. This means that more tax is paid
at the basic rate and less is paid at the higher rate.
Filing of return and payment
2012/13 personal tax return: due to be filed by 31 January 2014 (online) or 31 October 2013 (paper)
- penalty for late return: £100 (not restricted to tax due); further penalties for more than 3m/6m/12m late
2012/13 tax payable:
- tax on employment income paid under PAYE each month
- basic rate liability on savings and dividends usually settled by receiving the income net of tax paid or credited
- balance of tax due under self assessment (SA):
- payments on account due 31 January 2013 and 31 July 2013, based on the 2011/12 SA income tax and Class 4 NIC
- balance, plus any CGT, due 31 January 2014, with the first payment on account for 2013/14
Missing any payment dates leads to interest; missing the balancing payment date by 30 days will lead
to a 5% surcharge. Further 5% surcharges apply when the balancing payment is 6 months late and 12 months late.
Main personal allowances
| |
2012/13 |
2011/12 |
| Personal income tax allowance |
£8,105 |
£7,475 |
| CGT annual exemption |
£10,600 |
£10,600 |
| Blind person's allowance |
£2,100 |
£1,980 |
Age allowances
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2012/13 |
2011/12 |
| Personal allowance (PA) |
| • Age 65 - 74 in the tax year |
£10,500 |
£9,940 |
| • Age 75 and over in the tax year |
£10,660 |
£10,090 |
| • Minimum** |
£8,105 |
£7,475 |
Married couple' allowance (MCA)*(also for civil partners) |
| • Born before 6th April 1935 |
£7,705 |
£7,295 |
| • Minimum** |
£2,960 |
£2,800 |
Income Limit** |
£25,400 |
£24,000 |
** If the taxpayer's total income exceeds the income limit (extended for gift aid and pension contributions),
one-half of that excess is deducted from the allowances - first from the PA until the minimum is reached,
then from the MCA until the minimum is reached.
* Amount depends on age of older spouse; allowed at 10%; reduced if marriage or civil partnership took place during the tax year.
Personal allowances are reduced by £1 for every £2 of income over £100,000, so the PA is nil when income is £116,210 or more.
Main personal reliefs
Rent-a-room exemption for letting out part of the taxpayer's only or main residence:
gross income of £4,250pa.
Gift aid: on a cash gift to charity, the charity can reclaim 20/80 (25%) of the
donation from HMR&C if the donor makes a declaration. The donor increases the basic rate band
by the gross gift (i.e. donation x 100/80). The market value of gifts of land or quoted shares can be deducted from taxable
income for full tax relief, and the charity pays no tax on the gift received. Also "Give as you earn" scheme allows charitable
gifts to be made from pre-tax pay, which reduces tax paid under PAYE.
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