From 1 April 2007

Standard Rate 17.5%
VAT Fraction 7/47

Taxable Turnover Limits

Registration - last 12 months or
next 30 days over £64,000
Deregistration - next year under £62,000
Annual Accounting Scheme £1,350,000
Cash Accounting Scheme £1,350,000
Flat Rate Scheme £150,000

Income Tax

Starting rate band to £2,230
Tax Rate 10%
Basic rate band – next £32,370
Non-savings rate 22%
Savings rate 20%
Dividends ordinary rate 10%
Higher rate – income over £34,600
Higher tax rate 40%
Dividend upper rate 32.5%

Allowances that Reduce Taxable Income

Personal Allowances (PA)
- under 65 £5,225
- 65 to 74 £7,550
- 75 and over £7,690

Allowances that Reduce Tax

Married couple’s allowance (MCA)
Tax reduction - 73 to 74 £628.50
- 75 and over £636.50

The age- related allowances are
Withdrawn if income exceeds £20,900
Minimum PA £5,225
Minimum MCA tax reduction £244
Ages are at the end of the tax year

Enterprise Investment Scheme up to £400,000
Venture Capital Trust up to £200,000
Rent a Room exempt on gross annual rent £4,250
Construction Industry Scheme deduction rate 20/30%

Financial Year to 31 March 2008
Taxable Profits
First £300,000 20%
Next £1,200,000 32.5%
Over £1,500,000 30%

Class 1 (not contracted out) Employer Employee
Lower earnings limit £87.00
Payable on weekly earnings of
£100.01 - £670 12.8% 11%
Over £670 12.8% 1%
Over state retirement age as above Nil

Class 1A On relevant benefits 12.8% Nil
Class 2 Self employed £2.20 per week
Limit of net earnings for
exception £4,635 per annum
Class 3 Voluntary £7.80 per week
Class 4* Self employed on profits
£5,225 - £34,840 8%
Excess over £34,840 1%
*Exemption applies if state retirement age was reached by 6 April 2007

Motor Cars 25% On reducing balance
Max £3,000 per car
-CO2 emissions below 120g/km 100% First year allowance

Plant and machinery
- First year allowance 50% Small firms
40% Medium firms
- Writing down allowance 25% On reducing balance
- Long life assets 6% Writing down allowance
- Energy saving 100% First year allowance
- Water technology criteria list 100% First year allowance

Industrial and agricultural buildings 4% Of building cost

Taxed as top slice of savings income up to 40%
Annual exemption
- individual £9,200
- settlement(s) £4,600
Transfers between spouses and civil partners living together are exempt
Taper Relief
Complete years from 6 April 1998 1 2 3 4 5 6 7 8 9 10
Non business assets % relief* 0 0 5 10 15 20 25 30 35 40
Business assets% relief 50___________75_________
Apportionment may apply where asset has not been a business asset
Throughout the entire period of ownership
* Add one year if the asset was acquired before 17 March 1998

Income Tax and Class 4 NIC
1st payment on account 31 January 2008
2nd payment on account 31 July 2008
Balancing payment 31 January 2009

Capital Gains Tax 31 January 2009
Corporation Tax 9 months and one day after the end of
Accounting period (or by quarterly
Instalments if large company)