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Income Tax Allowances

	2006-07 (£)	2005-06 (£)
Personal allowance	5,035	4,895
Personal allowance for people aged 65-74 in year of assessment	7,280	7,090
Personal allowance for people aged 75 and over in year of assessment	7,420	7,220
Income limit for age-related allowances	20,100	19,500
Married couple's allowance for people born before 6 April 1935 (relief at 10%)	6,065	5,905
Married couple's allowance - aged 75 or more (relief at 10%)	6,135	5,975
Minimum amount of married couple's allowance	2,350	2,280
Blind person's allowance	1,660	1,610

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Tax Shelters

	2006-07 (£)	2005-06 (£)
Enterprise Investment Scheme (EIS) up to	400,000	200,000
Venture Capital Trust (VCT) up to	200,000	200,000
Golden Handshake maximum	30,000	30,000
Rent a Room - exempt on gross annual rent up to	4,250	4,250

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National Insurance

£ per week	2006-07	2005-06
Employees
Lower earnings limit, primary Class 1	£84	£82
Upper earnings limit, primary Class 1	£645	£630
Primary threshold	£97	£94
Secondary threshold	£97	£94
Employees' primary Class 1 rate between primary threshold and upper earnings limit	11%	11%
Employees' primary Class 1 rate above upper earnings limit	1%	1%
Employees' contracted out rebate	1.6%	1.6%
Married women’s reduced rate between primary threshold and 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 schemes	1%	1%
Employees' Rates are reduced to 4.85% for married women with valid certificates of election but the 1% rate above £645 still applies. Rates are nil for men over 65 and women over 60. Normal employers' contributions are still payable.
Class 1A and Class 1B	12.8%	12.8%
Class 2 rate (self-employed)	£2.10	£2.10
Class 2 small earnings exception	£4,465 per year	£4,345 per year
Special Class 2 rate for share fishermen	£2.75	£2.75
Special Class 2 rate for volunteer development workers	£4.20	£4.10
Class 3 rate (voluntary contributions)	£7.55	£7.35
Class 4 lower profits limit (self-employed)	£5,035 per year	£4,895 per year
Class 4 upper profits limit (self-employed)	£33,540 per year	£32,760 per year
Class 4 rate between lower profits limit and upper profits limit	8%	8%
Class 4 rate above upper profits limit	1%	1%

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Individual Savings Accounts

Annual exempt amount	Overall Limit (£)	Cash Limit (£)
2006/07	7,000	3,000
2005/06	7,000	3,000
Savings are exempt from income tax and capital gains tax.

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Pension Premiums

New rules apply with effect from 6th April 2006 (commonly known as A-Day):

• Maximum amount of pension contributions that qualify for tax relief is the greater of £3,600 or the  individuals UK relevant earnings.
• Contributions in excess of £215,000 give rise to a tax charge of 40% on the excess.
• Employer contributions need to be "wholly and exclusively" for the benefit of the trade to obtain tax relief.
• Minimum age for taking benefits is 50.
• Maximum age for tax relief on contributions is 74.
• Lifetime allowance is £1,500,000
• Maximum tax-free lump sum is 25%.

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Capital Gains Tax

Annual exempt amount	2006-07 (£)	2005-06 (£)
Individuals etc*	8,800	8,500
Other trustees	4,400	4,250
* Individuals, trustees of settlements for the disabled, and personal representatives of the estate of a deceased person. The amount chargeable to CGT is added onto the top of income liable to income tax for individuals and is charged to CGT at these rates: · below the starting rate limit at 10%, · between the starting rate and basic rate limits at 20%, · and above the basic rate limit at 40%. Transfers between husband and wife living together are exempt.

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CGT Taper Relief

	% of gain relieved
Complete years held after 5/4/1998*	Business Assets	Non -Business Assets
1	50	0
2	75	0
3	75	5
4	75	10
5	75	15
6	75	20
7	75	25
8	75	30
9	75	35
10 or more	75	40
* Including one bonus year for non-business assets held on 17 March 1998

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Corporation Tax

Corporation Tax On Profits - £ per year (unless stated)
Rate	Financial Year to 31/3/2007	Financial Year to 31/3/2006
Starting rate: 0%	N/A	0 - 10,000
Marginal relief	N/A	10,001 - 50,000
Marginal relief fraction	N/A	19/400
Effective marginal rate	N/A	23.75%
Small companies rate: 19%	0 - 300,000	50,001 - 300,000
Marginal relief	300,001 - 1,500,000	300,001 - 1,500,000
Marginal relief fraction	11/400	11/400
Effective marginal rate	32.75%	32.75%
Main rate: 30%	1,500,001 or more	1,500,001 or more
Non-corporate distribution rate	N/A	19%
The profits limits are reduced for accounting periods of less than 12 months and for a company with associated companies.

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Capital Allowances

	Writing Down Allowance	First Year Allowance
Plant and machinery	25% reducing balance (6% for some long life assets)	See note below
Energy saving plant and machinery	100%	100%
Motor cars	25% reducing balance (£3000 max)	100% on new cars with CO2 emission not exceeding 120gm/km
Industrial buildings	4% straight line
Agricultural buildings	4% straight line
Research & Development		100%
Commercial/industrial buildings in an enterprise zone		100%

Capital allowances allow the cost of capital assets to be written off against taxable profits. They replace the charge for depreciation in the business accounts, which is not allowable for tax relief.

Plant and machinery FYA

For small businesses: first year allowance (FYA) of 40% is available for 12 months from 6.4.05 (1.4.05 for companies). FYA of 50% available from 6.4.06 (1.4.06 for companies). A small firm is defined as a business that satisfies any two of the following conditions: (a) turnover £5,600,000 or less (b) assets £2,800,000 or less (c) not more than 50 employees.

For medium-sized businesses: FYA of 40%. A medium firm is defined as a business that satisfies any two of the following conditions: (a) turnover £22,800,000 or less (b) assets £11,400,000 or less (c) not more than 250 employees.

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Tax Free Mileage Allowances

	First 10,000 business miles in the tax year	Each mile over 10,000 miles in the tax year	Extra passenger making same trip
Cars and vans	40p	25p	5p
Motor cycles	24p	24p	N/A
Bicycles	20p	20p	N/A
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.

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Car And Fuel Benefits

	% of list price (max £80,000)
CO2 emissions (2006/07) grams per kilometre	Petrol	Diesel
140	15	18
145	16	19
150	17	20
155	18	21
160	19	22
165	20	23
170	21	24
175	22	25
180	23	26
185	24	27
190	25	28
195	26	29
200	27	30
205	28	31
210	29	32
215	30	33
220	31	34
225	32	35
230	33	35
235	34	35
240	35	35
To find out how the CO2 figure for your car, you can... · visit the Vehicle Certification Agency www.vca.gov.uk · inspect the car's V5 registration document · ask your dealer · look at the data pages of car magazines For cars registered from 1 January 1998 with no CO2 emissions figures, the tax charge is 15% of the list price for engines up to 1,400 cc, 22% for engines of 1,401 cc to 2,000 cc and 32% for engines above 2,000 cc. 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 For 2006/07, car fuel is calculated by applying the above car benefit percentage to a figure of £14,400. 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.

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Van Benefits

Per vehicle - 2006/07 and 2005/06
Vehicles under 4 years old £500	Vehicles at least 4 years old £350
From 6 April 2005 there is no taxable benefit where employees have to take their company vans home and are not allowed any other private use. Otherwise, the taxable benefit for the private use of a company van and fuel, if supplied, is £500 or £350 (vans less or more than four years old) per annum, until 5 April 2007. From 6 April 2007 the taxable benefit for the unrestricted use of company vans will be £3,000 (with no reduction for older vans) plus a further £500 of taxable benefit if fuel is provided by the employer for private travel. The maximum tax payable on the use of a company van will therefore increase from April 2007 from £200 to £1,400 p.a., and the employer's Class1A NIC payable will increase from £64 to £448 p.a.

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Fuel Rates

	Petrol	Diesel	LPG
Up to 1400cc	11p	10p	7p
1401cc to 2000cc	13p	10p	8p
Over 2000cc	18p	14p	11p

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Charitable Gifts

Gift Aid

Individuals can claim higher rate relief on cash gifts and payments to charities using gift aid. It allows a charity to reclaim the basic-rate tax on donations made by UK taxpayers from HMRC. Higher rate taxpayers can claim an additional 18% tax relief on the gross donation through their tax return.

You can make a claim for a charitable donation made in one tax year to be treated as if it had been made in the previous tax year.

To qualify for gift aid you must pay at least as much tax as the amount the charities will reclaim on your gifts in the tax year in which you make them. You must make a declaration to the charity concerned.

Give As You Earn

Give As You Earn allows employees to make regular donations tax-free from their gross salary. The employer will deduct the amount from their salary for payment to the charity.

The taxable pay of the employee is reduced by the amount of their donation.

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Inheritance Tax

Inheritance Tax Thresholds
Year	Amount (£)
2006-07	285,000
2005-06	275,000
Amounts above the threshold are taxed at 40%. Most transfers between spouses and civil partners are exempt. Chargeable lifetime transfers are initially charged at 20%. Business Property Relief business or interest therein - 100% qualifying shareholders in unquoted* companies - 100% land, buildings, machinery, or plant used by transferor's controlled company or partnership - 50% Agricultural property - 50% or 100% *Unquoted companies include those listed on AIM Other Reliefs: Annual gifts of up to £3000 per donor are exempt. Small gifts £250 Marriage gifts... - parent £5,000 - grandparent £2,500 - bride/groom £2,500 - other £1,000
Reduced charge on gifts made 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

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Stamp Duty

Please note that the applicable rate of Stamp Duty Land Tax must be applied to the whole of the consideration paid to acquire the land / buildings.

Rate	Land in disadvantaged areas		All other land in the UK
	Residential	Non-residential	Residential	Non-residential
Zero	£0 - £150,000	£0 - 150,000	£0 - 125,000	£0 - 150,000
1%	Over £150,000 - 250,000	Over £150,000 - 250,000	Over £125,000 - 250,000	Over £150,000 - 250,000
3%	Over £250,000 - 500,000	Over £250,000 - 500,000	Over £250,000 - 500,000	Over £250,000 - 500,000
4%	Over £500,000	Over £500,000	Over £500,000	Over £500,000

New leases (lease duty)

Duty on rent

Rate	Net present value of rent
	Residential	Non-residential
Zero	£0 - 125,000	£0 - £150,000
1%	Over £125,000	Over £150,000

Please note that when calculating duty payable on the 'NPV' (Net Present Value) of leases, you must reduce your 'NPV' calculation by the following before applying the 1% rate.

Residential - £125,000
Non-Residential - £150,000

Duty on premium is the same as for transfers of land (except special rules apply for premium where rent exceeds £600 annually).

The rate of stamp duty / stamp duty reserve tax on the transfer of shares and securities is unchanged at 0.5% for 2006-07.

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Value Added Tax

Standard Rate	17.5%
VAT Fraction	7/47
Lower rate	5%
Registration level from 1 April 2006	£61,000 p.a.
Deregistration limit from 1 April 2006	£59,000 p.a.
Cash accounting scheme - up to	£660,000
Optional flat rate scheme - up to	£150,000
Annual accounting scheme - up to	£1,350,000
VAT fuel scale charges from 1 May 2006
	Quarterly Returns Scale Charge
Cylinder capacity of vehicle	Petrol £	VAT £	Diesel £	VAT £
Up to 1400cc	273	40.66	260	38.72
1401cc to 2000cc	346	51.53	260	38.72
Over 2000cc	508	75.66	331	49.30

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Minimum Wage

	From 1 October 2006	From 1 October 2005
22 and over	£5.35 p.h.	£5.05 p.h.
18 - 21	£4.45 p.h.	£4.25 p.h.
16 and 17	£3.30 p.h.	£3.00 p.h.

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Tax Credits & Child Benefit

Rates and Thresholds	2006-07	2005-06
Working Tax Credit - £ per year (unless stated)
Basic element	1,665	1,620
Couple and lone parent element	1,640	1,595
30 hour element	680	660
Disabled worker element	2,225	2,165
Severe disability element	945	920
50+ Return to work payment (16-29 hours)	1,140	1,110
50+ Return to work payment (30+ hours)	1,705	1,660
Childcare Element of the Working Tax Credit - £ per year (unless stated)
Maximum eligible cost for one child	£175 per week	£175 per week
Maximum eligible cost for two or more children	£300 per week	£300 per week
Percentage of eligible costs covered	80%	70%
Child Tax Credit Family element	545	545
Family element, baby addition	545	545
Child element	1,765	1,690
Disabled child element	2,350	2,285
Severely disabled child element	945	920
Income thresholds and withdrawal rates - £ per year (unless stated)
First income threshold	5,220	5,220
First withdrawal rate (per cent)	37%	37%
Second income threshold	50,000	50,000
Second withdrawal rate (per cent)	6.67%	6.67%
First threshold for those entitled to Child Tax Credit only	14,155	13,910
Income disregard	25,000	2,500
Child Benefit/Guardian Allowance - £ per week
Eldest/Only Child	17.45	17.00
Other Children	11.70	11.40
Eldest/Only Child (Lone Parent Rate)	17.55	17.55
Guardian’s Allowance	12.50	12.20

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Social Security Benefits

Weekly Benefit	2006-07	2005-06
Basic retirement pension - single person	£84.25	£82.05
Basic retirement pension - 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
Statutory Maternity Pay - 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*
Jobseekers Allowance - Single Person (over 25)	£57.45	£56.20
Jobseekers Allowance - Married Couple	£90.10	£88.15
* Or 90% of weekly earnings if this is lower

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Key Tax Dates

Income Tax and Class 4 NIC

31 July 2006 - 2005/06 2nd payment on account
31 Jan 2007 - 2005/06 balancing payment and 2006/07 1st payment on account
31 July 2007 - 2006/07 2nd payment on account
31 Jan 2008 - 2006/07 balancing payment and 2007/08 1st payment on account

Tax Return

31 January 2007 - Filing deadline for 2006 Return

Capital Gains Tax

31 January 2007 - 2005/06 CGT payment due
31 January 2008 - 2006/07 CGT payment due

Inheritance Tax

Payment due 6 months after the end of the month of death or chargeable transfer.

For chargeable lifetime transfers from 6 April to 30 September, payment is due by 30 April in the following year.

Corporation Tax

Payment due 9 months and one day after the end of the accounting period. Accounts longer than 12 months are divided into two periods.

2005/06 PAYE Return Deadlines

19 May 2006 - P35, P14, P38, P38A and CIS36
31 May 2006 - P60s to employees
6 July 2006 - P11D, P11Db and P9D - and give copies to employees
19 July 2006 - Payment of Class 1A National Insurance on Benefits due

See more important dates