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Tax Rates 2003 / 04
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Allowed at top rate of tax |
2003/04 | 2002/03 | |
| Personal Allowance | £4,615 | £4,615 | |
| Personal Allowance (65-74)* | 6,610 | 6,100 | |
| Personal Allowance (75+)* | 6,720 | 6,370 | |
| Blind Person's Allowance | 1,510 | 1,480 | |
| Allowed only at 10% | |||
| Children's Tax Credit** | - | £5,290 | |
| Children's Tax Credit - baby rate*** | - | 10,490 | |
| Married Couple's Allowance (65-74)* | 5,565 | 5,465 | |
| Married Couple's Allowance (75+)* | 5,635 | 5,535 | |
| Income Limit for age-related allowances | 18,300 | 17,900 | |
| * Age allowances are reduced £1 for every £2 by which income exceeds the income limit, until the age allowance is reduced to the normal allowance. Personal allowance is reduced before married couple's allowance. MCA is reduced to a minimum of £2,150 (2002/03: £2,110). | |||
| ** Reduced by £2 for every £3 of income charged at higher rate. | |||
| *** Only available in the year of the child's birth. Reduced like basic CTC.. | |||
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Important limits |
2003/04 | 2002/03 | |
| Individual Savings Account annual limit | £7,000 | £7,000 | |
| Rent a room exemption | 4,250 | 4,250 | |
| Enterprise Investment Scheme annual limit* | 150,000 | 150,000 | |
| Venture Capital Trust annual limit* | 100,000 | 100,000 | |
| *Relief restricted to 20% | |||
| 2003/04 | 2002/03 | |||||
| Lower rate on first | £1,960 | £1,920 | ||||
| Basic rate on next | 28,540 | 27,980 | ||||
| Higher rate at taxable income over | 30,500 | 29,900 | ||||
| Tax rates 2003/04 (unchanged from 2002/03) | ||||||
| Rates differ for Dividends/Interest/Other | D | I | O | |||
| Starting rate | 10% | 10% | 10% | |||
| Basic rate | 10% | 20% | 22% | |||
| Higher rate | 32.5% | 40% | 40% | |||
| Dividends taxed at highest part of income, then interest | ||||||
| Discretionary trust rate (25% on dividends) | 34% | |||||
| Year to 31.3.2004 & 31.3.2003 | ||
| Main rate | 30% | |
| Profits above | £1.5m | |
| Small companies rate | 19% | |
| Profits between | £50k - £300k | |
| Starting rate | 0% | |
| Profits below | £10k | |
| Small/large marginal band | £300k - £1.5m | |
| Fraction (effective rate) | 11/400 (32.75%) | |
| Starting/small marginal band | £10k - £50k | |
| Fraction (effective rate) | 19/400 (23.75%) | |
| Allowance % | |
| Plant and machinery | |
| - first year allowance for small or medium businesses | 40 |
| - writing down allowance (6% on some long life assets) | 25 |
| - computers for small businesses (to 31.3.04) | 100 |
| - cars in general (max £3,000pa) | 25 |
| - certain energy efficient plant, including low emission cars | 100 |
| Industrial buildings writing down allowance | 4 |
Car Benefit Assessment 2003/04
| Charge based on a percentage of the initial list price of the car, including accessories, delivery charges and VAT. The percentage depends on the carbon dioxide emissions rating of the car, and whether the engine runs on petrol or diesel. | ||
| Ratings | Petrol | Diesel |
| 0-155g/km | 15% | 18% |
| over 155g/km | +1% for each extra 5g/km | |
| Maximum | 35% | 35% |
| Special
rules apply to older cars which do not have a CO2 rating. Company vans are charged at £500 (£350 where 4 years or older). Employee contributions for private use are deducted from the taxable figure. |
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Car fuel benefit
Tax free mileage allowances
For 2003/04, the benefit will be calculated using the same percentage as that used for the car benefit, applied to a standard figure of £14,400. The taxable amount will therefore be between £2,160 (min.) and £5,040 (max.). In previous years the charge was based on engine capacity and fuel type.
Tax Free
Mileage Allowances
| Higher Rate | Lower Rate | |
| 2003/04 & 2002/03 unchanged | ||
| All cars | 40p | 25p |
| Motorcycles | 24p | 24p |
| Bicycles | 20p | 20p |
| Business passengers | 5p | 5p |
| Higher Rate allowed up to 10,000 business miles | ||
| Fuel-only allowances for company cars | ||
| Petrol | Diesel | |
| 2003/04 & 2002/03 unchanged | ||
| Up to 1400cc | 10p | 9p |
| 1401 - 2000cc | 12p | 9p |
| Over 2000cc | 14p | 12p |
| Standard rate (7/47 of VAT-inclusive price) | 17.5% | |||||||||||||||||||||||||||||||||||||
| Registration level from 10.4.03 | £56,000 per annum | |||||||||||||||||||||||||||||||||||||
| Deregistration level from 10.4.03 | £54,000 per annum | |||||||||||||||||||||||||||||||||||||
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National Insurance Contributions
| Class 1 (Employee) | |||
| Within SERPS | Contracted Out | ||
| Salary Related | Money Purchase | ||
| Employee contributions | |||
| - on earnings between £89.01 and £595pw | 11.0% | 9.4% | 9.4% |
| - on earnings above £595pw | 1.0% | 1.0% | 1.0% |
| Employer contributions | |||
| - on earnings between £89.01 and £595pw | 12.8% | 9.3% | 11.8% |
| - on earnings above £595pw | 12.8% | 12.8% | 12.8% |
| Employer contributions (at 12.8%) are due on most benefits in kind and on tax paid on an employee's behalf under a PAYE settlement agreement. | |||
| Class 2 (Self-employed) | |||
| Flat rate per week | £2.00 | ||
| Small earnings exception: profits per annnum | £4,095 | ||
| Class 3 (Voluntary) | |||
| Flat rate per week | £6.95 | ||
| Class 4 (Self-employed) | |||
| On profits £4,615 - £30,940 | 8.0% | ||
| On profits over £30,940 | 1.0% | ||
Personal
Pensions (PPPs)
and Retirement Annuity Premiums (RAPs)
| Max contributions: | % Of Net Relevant Earnings | |
| Age at beginning of year | RAPs% | PPPs% |
| 35 or less | 17.5 | 17.5 |
| 36 - 45 | 17.5 | 20.0 |
| 46 - 50 | 17.5 | 25.0 |
| 51 - 55 | 20.0 | 30.0 |
| 56 - 60 | 22.5 | 35.0 |
| 61 and over | 27.5 | 40.0 |
| Maximum
net relevant earnings for 2003/04 PPPs: £99,000. No limit for RAPs. People with no net relevant earnings can pay contributions of £3,600 gross in 2003/04, except for some members of occupational pension schemes and those aged 75 and over. |
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| Charges on or after 6th April 2003 | Rates % | Charges between 6th April 2002 and 5th April 2003 |
| 0 - £255,000 | NIL | 0 - £250,000 |
| Above £255,000 | 40% | Above £250,000 |
| Lifetime
chargeable transfers at half the death rate, ie 20%. Business property relief of 100% for all shareholdings in qualifying unquoted trading companies and for most unincorporated trading businesses; agricultural property relief at 100% for qualifying holdings of agricultural land. Annual exemption for lifetime gifts £3,000. Small gifts - annual amount per donee £250. |
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| Reduced tax charge on transfers within 7 years of death | ||
| Years before death | Percentage of death rates | |
| 0 - 3 | 100% | |
| 3 - 4 | 80% | |
| 4 - 5 | 60% | |
| 5 - 6 | 40% | |
| 6 - 7 | 20% | |
| Over 7 | NIL | |
| Annual exempt amount 2003/04: individuals £7,900, trustees £3,950. Relief given for effect of inflation for periods of ownership up to April 1998. Tapering relief is based on complete years of ownership after 5 April 1998 (with one year added for ownership on 17.3.98 in the case of non-business assets): | ||
| Complete years owned for taper purposes: | % of gain charged | |
| Business asset | Non-business asset | |
| 1 year | 50% | 100% |
| 2 years | 25% | 100% |
| 3 years | 25% | 95% |
| 4 years | 25% | 90% |
| 5 years | 25% | 85% |
| 6 years | 25% | 80% |
| 7 years | 25% | 75% |
| Taper
increases at 5% p.a. for non-business assets up to a maximum of
10 years (40% relief). Taper rates were different for business assets disposed of prior to 6.4.02. Retirement relief is abolished after 5.4.2003. Net gains after all reliefs and annual exempt amount are taxed at marginal income tax rates for interest income (ie 10%, 20%, 40%). |
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| % of Total Consideration | |
| Shares and marketable securities | 0.5% |
| Land and other property * | |
| 0 - £60,000 | NIL |
| £60,001 - £250,000 | 1% |
| £250,001 - £500,000 | 3% |
| £500,001 and over | 4% |
*From 1.12.03, these rates only apply to transfers of land or of interests in partnerships. Different rates apply for land in disadvantaged areas.
Earliest due dates for payment of tax
| Income Tax | |
| Employment | Most tax paid under PAYE |
| Interest, dividends | Lower/basic rate liability usually settled before receipt |
| Untaxed sources, plus balance on employment and higher rates on investment income (self assessment) | Payments on account for 2003/04 on 31.1.04 and 31.7.04 based on 2002/2003 tax; balance due 31.1.2005 with first installment for 2004/05. |
| Capital Gains Tax | 31 January following the end of the tax year. |
| Inheritance Tax | Normally 12 months after month of death. |
| Corporation Tax | Large companies pay by instalments starting 6 1/2 months through the accounting period; balance, and total for small/medium companies, 9 months and 1 day after end of period. |