Finance Bill Tracking Service 2010 | Budget 2010

Press Notice 2 - Rates and allowances in 2010-11

Main changes and other key tax rates and allowances 2010-11

2010-11 rates and allowances for income tax, national insurance contributions, Working and Child Tax Credit rates, Child Benefit rates, Guardian's Allowance rates, state pension and Pension Credit, pension tax, ISAs, capital gains tax, stamp duty land tax, inheritance tax, corporation tax, company taxes payable on profits from UK oil and gas production, capital allowances, R&D tax credits, stamp tax on shares, business rates, VAT, air passenger duty, fuel duty, vehicle excise duty, landfill tax, aggregates levy, climate change levy, tobacco duties, alcohol duties, gambling taxes and landline duty are set out below.

PERSONAL TAX, SUPPORT AND BENEFITS

Income tax

As announced at Budget 2009,from April 2010 a new 50 pence additional tax rate will apply to income above £150,000 and the income tax personal allowance will gradually be withdrawn for those with incomes over £100,000.

Income tax: Bands of taxable income, £ per year
2009-10 2010-11
Starting rate for savings   0 - 2,440 0 -2,440
Basic rate 0 - 37,400 0 - 37,400
Higher Rate Over 37,400 37,401 - 150,000
Additional rate N/A Over 150,000
Income tax rates 2009-10 2010-11
Starting rate for savings 10% 10%
Basic rate 20% 20%
Higher rate 40% 40%
Additional rate N/A 50%
Basic rate on dividends (effective rate with tax credit) 10% (0%) 10% (0%)
Higher rate on dividends (effective rate with tax credit) 32.5% (25%) 32.5% (25%)
Additional rate on dividends (effective rate with tax credit) N/A 42.5% (36.1%)
Income tax: Income tax allowances 2010-11
£ per year (unless stated) 2009-10 2010-11*
Personal allowance:
Age under 65 6,475 6,475
Age-related allowance (65-74) 9,490 9,490
Age-related allowance (75+) 9,640 9,640
Income limit for age-related allowances 22,900 22,900
Married couples allowance**:    
Age over 75 6,965 6,965
Minimum amount 2,670 2,670
Blind Persons Allowance 1,890 1,890

*From April 2010, the personal allowance will be gradually withdrawn for income over £100,000 at a rate of £1 of allowance lost for every £2 over £100,000 until it is completely removed.

** Available to people born before April 6 1935. Tax relief for this allowance is restricted to 10 per cent.

National Insurance Contributions

Employee and employer rates and thresholds
Employee (Class 1 primary) Employer (Class 1 secondary)
Earnings per week (£) 2009-10 2010-11 2009-10 2010-11  
Below 97* (Lower Earnings Nil Nil Nil Nil  
Limit)
97 to 110 (Primary Nil Nil Nil Nil  
Threshold/ Secondary
Threshold)
110 to 844 (Upper 11% 11% 12.8% 12.8%
Earnings Limit)
Above 844 1% 1% 12.8% 12.8%

*£95 in 2009-10

Self-employed rates and thresholds
Class 2 (per week)* Class 4
Profits per year (£) 2009-10 2010-11 2009-10 2010- 2010- 11
Below 5,075 (Small Nil Nil Nil Nil
Earnings Exception)
5,075 to 5,715 (Lower £2.40 £2.40 Nil Nil
Profits Limit)
5,715 to 43,875 (Upper £2.40 £2.40 8% 8%
Profits Limit)
Above 43,875 £2.40 £2.40 1% 1%

*Class 2 NICs are paid at a weekly flat rate of £2.40 by all self- employed persons. Those with profits less than, or expected to be less than, the level of the Small Earnings Exception may apply for exemption from paying Class 2 contributions.

Other Class 1 rates and contracted-out rebates
Employee rate Employer rate
(Class 1 only)
2009-10 2010-11 2009-10 2010-11
Contracted out rebate - salary related 1.6% 1.6% 3.7% 3.7%
schemes
Contracted out rebate - money 1.6% 1.6% 1.4% 1.4%
purchase schemes
Reduced rate for married women 4.85% 4.85% N/a N/a
between Primary Threshold and Upper
Earnings Limit
Special Class 2 rates
Self-employed rate
2009-10 2010-11
Share fishermen £3.05 £3.05
Volunteer development workers £4.75 £4.85
Class 3 rate
Voluntary contributions £12.05 £12.05

Working and Child Tax Credits rates

As announced at the 2009 Pre-Budget Report, on 6 April 2010 all elements of the Working Tax Credit (WTC), apart from the childcare element, will increase by 1.5 per cent. The limits on eligible childcare costs in the childcare element remain at £175 for one child and £300 for two or more children. The proportion of childcare costs payable through the childcare element of WTC remains at 80 per cent. The disability elements of the Child Tax Credit will increase by 1.5 per cent. The family element and baby addition remain unchanged. As announced in Budget 2009, the child element of the Child Tax Credit will rise by £20 above indexation in April 2010, an increase of £65 in cash terms. As announced at the 2009 Pre-Budget Report, the threshold for receipt of the maximum Child Tax Credit will rise to £16,190 reflecting the income level at which a family in receipt of the basic and couple or lone parent elements of WTC would have their entitlement to WTC tapered to zero, and the threshold for receiving maximum family element of CTC remains at £50,000. The withdrawal rate for the family element remains at 6.67 per cent, and for the rest of tax credits at 39 per cent.

Working and Child Tax Credits rates
£ per year (unless stated) April 2009 April 2010
Working Tax Credit
Basic element 1,890 1,920
Couple and lone parent element 1,860 1,890
30 hour element 775 790
Disabled worker element 2,530 2,570
Severe disability element 1,075 1,095
50+ Return to work payment (16-29 hours) 1,300 1,320
50+ Return to work payment (30+ hours) 1,935 1,965
Childcare element of the Working Tax Credit
£175 per £175 per
Maximum eligible cost for one child
week week
Maximum eligible cost for two or more £300 per £300 per
children week week
Percentage of eligible costs covered 80% 80%
Child Tax Credit
Family element 545 545
Family element, baby addition 545 545
Child element 2,235 2,300
Disabled child element 2,670 2,715
Severely disabled child element 1,075 1,095
Income thresholds and withdrawal rates
First income threshold 6,420 6,420
First withdrawal rate 39% 39%
Second income threshold 50,000 50,000
Second withdrawal rate 6.67% 6.67%
First threshold for those entitled to Child Tax
16,040 16,190
Credit only
Income disregard 25,000 25,000

Child Benefit and Guardian's Allowance rates

As announced at the Pre-Budget Report 2009, on 12 April Child Benefit and Guardian's Allowance will increase by 1.5 per cent.

Child Benefit rates
£ per week Jan 2009 April 2010
Eldest/Only Child 20 20.30
Other Children 13.20 13.40
Guardian's Allowance rates
£ per week April 2009 April 2010
Guardian's Allowance 14.10 14.30

State Pension and Pension Credit

As announced at the Pre-Budget Report 2009, on 12 April 2010 the basic State Pension will increase by 2.5 per cent, in line with the Government's commitment to increase it by the higher of September's Retail Prices Index or 2.5 per cent. Pension credit means that no single pensioner need live on less than £132.60 a week in 2010-11 and no couple on less than £202.40

State Pension and Pension Credit
£ per week (unless stated) 2009-10 2010-11
State Pension
Category A or B basic State Pension 95.25 97.65
Category B basic State Pension (lower) -
spouse or civil partner's insurance 57.05 58.50
Category C or D - non-contributory 57.05 58.50
Category C (lower) - non-contributory 34.15 35.00
Pension Credit
Standard minimum guarantee - single 130.00 132.60
Standard minimum guarantee - couple 198.45 202.40
Savings Credit threshold - single 96.00 98.40
Savings Credit threshold - couple 153.40 157.25
Savings Credit maximum - single 20.40 20.52
Savings Credit maximum - couple 27.03 27.09

Pensions tax

Pensions tax 2009-10 2010-11
Annual allowance £245,000 £255,000
Lifetime allowance £1.75m £1.8m

Individual Savings Account

As announced at Budget 2009, from 6 April 2010 the annual ISA investment limit for every adult is £10,200, up to £5,100 of which can be saved in cash. This higher limit has applied for those aged 50 and over since October 2009.

Individual Savings Account 2009-10 2010-11
For those aged under 50 £7,200, up to £3,600 £10,200, up to £5,100
of which can be saved of which can be saved
in cash in cash
For those aged 50 and over From October 2009, £10,200, up to £5,100
£10,200, up to £5,100 of which can be saved
of which can be saved in cash
in cash

TAXES ON CHARGEABLE GAINS, INHERITANCE TAX, ASSETS AND PROPERTY

Capital Gains Tax

Budget 2010 announces an increase in the Entrepreneurs' Relief lifetime limit from the first £1 million to the first £2 million of qualifying gains.

Capital Gains Tax 2009-10 2010-11
Standard rate 18% 18%
Entrepreneurs' Relief effective rate 10% 10%
Annual Exempt Amount £10,100 £10,100
Entrepreneurs' Relief lifetime limit of £1,000,000 £2,000,000
gains

Stamp Duty Land Tax

Budget 2010 announces a two-year stamp duty land tax relief for first time buyers for residential property purchases up to £250,000.

Stamp duty land tax
Rate Residential Non-residential
2009-10 2010-11 2009-10 2010-11
Total value of consideration
Zero £0 - £125,000* £0 - £125,000* £0 - £150,000 £0 - £150,000
1% Over £125,000 Over £125,000 Over £150,000 Over £150,000
- £250,000** - £250,000† - £250,000 - £250,000
3% Over £250,000 Over £250,000 Over £250,000 Over £250,000
- £500,000 - £500,000 - £500,000 - £500,000
4% Over £500,000 Over £500,000 Over £500,000 Over £500,000
*Starting residential threshold in 2,000 disadvantaged areas is £150,000
**SDLT holiday for residential transactions up to £175,000 applied until 31
December 2009
†First time buyers can claim relief from SDLT on residential transactions up to
£250,000 between 25 March 2010 and 25 March 2012

Inheritance tax

As announced at the 2009 Pre-Budget Report, the individual nil-rate band will be held at £325,000 in 2010-11.

Inheritance tax
2009-10 2010-11
Rate 40% 40%
Individual nil-rate band £325,000 £325,000

BUSINESS AND FINANCIAL SERVICES

Corporation tax on profits

Corporation tax on profits 2009-2010 2010-2011
£0 - £300,000 21% 21%*
£300,001 - £1,500,000 Marginal rate Marginal rate
£1,500,001 or more 28% 28%

* The 2009 Pre-Budget Report announced that a rise in the small companies' rate to 22 per cent would be deferred until 2011-12

Company taxes payable on profits from UK oil and gas production

Company taxes payable on profits
2009-2010 2010-2011
from UK oil and gas production
Ring fence corporation tax main rate 30% 30%
Supplementary charge 20% 20%
Petroleum revenue tax 50%* 50%*

* Petroleum Revenue Tax is deductible in computing profits chargeable to ring fence corporation tax and supplementary charge.

Capital Allowances

Budget 2010 announces an increase in the threshold of the Annual Investment Allowance to £100,000

Capital Allowances 2009-10 2010-11
Main writing down allowance 20% 20%
Special rate writing down allowance 10% 10%
Temporary first year-allowance 40% 0
Annual Investment Allowance £50,000 £100,000

Research and Development Tax Credits

R & D Tax Credit 2009-10 2010-11

SME Rate 175% 175%
Large Company Rate 130% 130%

Stamp taxes on shares

Stamp taxes on shares 2009-10 2010-11
Rate for stamp taxes on shares 0.5% 0.5%

Business rates

Updated property values for business rates take effect from 1 April 2010 (revaluation for business rates takes place every five years). The multiplier for 2010-11 is reduced to compensate, so that total revenue from business rates remains the same in real terms. The standard multiplier includes a supplement on the small business multiplier to fund small business rate relief (SBRR). Budget 2010 announces a temporary increase in the level of small business rate relief for one year, from 1 October 2010.

Business rates Rate per pound of a business property's
rateable value
2009-10 2010-11
Standard multiplier 48.5p 41.4p
Small business multiplier 48.1p 40.7p

VALUE ADDED TAX

Value Added Tax

VAT Up to 31 December 2009 From January 2010
Standard rate 15% 17.5%
Reduced rate 5% 5%

ENVIRONMENT AND TRANSPORT

Air passenger duty

Air passenger duty From 1 November From 1 November
2009 2010
Band A (0-2000m) reduced £11 £12
rate
Band A (0-2000m) standard £22 £24
rate
Band B (2001-4000m) reduced £45 £60
rate
Band B (2001-4000m) £90 £120
standard rate
Band C (4001-6000m) reduced £50 £75
rate
Band C (4001-6000m) £100 £150
standard rate
Band D (>6,000m) reduced £55 £85
rate
Band D (>6,000m) standard £110 £170
rate

Fuel Duty rates

Budget 2009 announced that the main rate of fuel duty would increase by 1pence per litre in real terms on 1 April 2010. This equates to a 2.76 pence per litre increase. Budget 2010 announces that this increase will be implemented in three stages: 1 pence per litre on 1 April 2010, 1 pence per litre on 1 October 2010, and 0.76 pence per litre on 1 January 2011.

Fuel Duty rates in 2010-11
Pence per litre From 1 Sept From 1 April From 1 From 1
(unless stated) 2009 to 1 2010 October January
April 2010 2010 2011
Ultra-low sulphur petrol/diesel 56.19p 57.19p 58.19p 58.95p
Sulphur-free petrol/diesel 56.19p 57.19p 58.19p 58.95p
Biodiesel 36.19p 57.19p 58.19p 58.95p
Bioethanol 36.19p 57.19p 58.19p 58.95p
Liquefied petroleum gas used as 27.67p per 30.53p per 31.95p per 33.04p per
road fuel kg kg kg kg
22.16p per 23.60p per 25.05p per 26.15p per
Natural gas used as road fuel kg kg kg kg
Rebated gas oil (red diesel) 10.80p 10.99p 11.18p 11.33p
Fuel Oil 10.37p 10.55p 10.74p 10.88p

Vehicle Excise Duties

Vehicle Excise Duty for cars registered on or after 1 March 2001

VED CO2 emissions Standard rate Standard rate First year rate
band 2009-10* 2010-11* 2010-11*
(g/km)
A Up to 100 £0 £0 £0
B 101-110 £35 £20 £0
C 111-120 £35 £30 £0
D 121-130 £120 £90 £0
E 131-140 £120 £110 £110
F 141-150 £125 £125 £125
G 151-165 £150 £155 £155
H 166-175 £175 £180 £250
I 176-185 £175 £200 £300
J 186-200 £215 £235 £425
K** 201-225 £215 £245 £550
L 226-255 £405 £425 £750
M Over 255 £405 £435 £950

*Alternative fuel discount: 2009-10, A-I £20, J-M £15; 2010-11, £10 all cars

**Includes cars emitting over 225g/km registered before 23 March 2006

Vehicle Excise Duty for vans registered on or after 1 March 2001

VED band 2009-10 rate 2010-11 rate
Euro 4* & 5**
£125 £125
discount rate
Standard rate £185 £200

*for Euro 4 compliant vans registered between 1 March 2003 and 31 December 2006

**for Euro 5 compliant vans registered between 1 January 2009 and 31 December 2010

Vehicle Excise Duty for cars and vans registered before 1 March 2001

VED band 2009-10 rate 2010-11 rate
Up to 1549cc £125 £125
Over 1549cc £190 £205

Vehicle Excise Duty for motorcycles

VED band 2009-10 rate 2010-11 rate

Up to 150cc £15 £15
151-400cc £33 £33
401-600cc £48 £50
Over 600cc £66 £70

Vehicle Excise Duty for Heavy Goods Vehicles

VED band Standard rate Reduced Pollution Certificate rate
2009-10 2010-11 2009-10 2010-11
A £165 £165 £160 £160
B £200 £200 £160 £160
C £450 £450 £210 £210
D £650 £650 £280 £280
E £1,200 £1,200 £700 £700
F £1,500 £1,500 £1,000 £1,000
G £1,850 £1,850 £1,350 £1,350

Environmental taxes

Environmental taxes 2009-10 2010-11
Landfill tax
Standard rate £40 per tonne £48 per tonne
Lower rate £2.50 per tonne £2.50 per tonne
Aggregates levy
Aggregates levy rate £2 per tonne £2 per tonne
Climate Change Levy
Electricity 0.470 pence per kilowatt 0.470 pence per
hour (kWh) kilowatt hour (kWh)
Natural gas 0.164 pence per kWh 0.164 pence per kWh
Liquified petroleum gas 1.050 pence per kilogram 1.050 pence per
(kg) kilogram (kg)
Solid fuel 1.281 pence per kg 1.281 pence per kg

OTHER INDIRECT TAXES AND DUTIES

Tobacco duty rates

Budget 2010 announces that on 24 March 2010 tobacco duty rates will be:

Product Previous Duty Duty on 24 March 2010
Cigarettes 24% of the retail price plus 24% of the retail price plus
£114.31 per thousand £119.03 per thousand
cigarettes cigarettes
Cigars (per kilogram) £173.13 £180.28
Hand-rolling tobacco (per £124.45 £129.59
kilogram)
Other smoking tobacco and £76.12 £79.26
chewing tobacco (per
kilogram)

Alcohol duty rates

As announced at Budget 2008, alcohol duty rates on beer, wine and spirits will increase by 2 per cent above inflation. Cider duty rates will increase by 10 per cent above inflation. These changes will have effect on 29 March 2010:

Alcohol duties 2009-10 2010-11
Rate £ per litre of pure alcohol
Spirits 22.64 23.80
Spirits-based RTDs (ready to drink) 22.64 23.80
Wine and made-wine: exceeding 22% abv. 22.64 23.80
Rate £ per hectolitre per cent of alcohol in the beer
Beer 16.47 17.32
Rate £ per hectolitre of product
Still cider and perry: 31.83 36.01
exceeding 1.2% - not exceeding 7.5% abv.
Still cider and perry: 47.77 54.04
exceeding 7.5% - less than 8.5% abv.
Sparkling cider and perry: 31.83 36.01
exceeding 1.2% - not exceeding 5.5% abv.
Sparkling cider and perry: 207.20 217.83
exceeding 5.5% - less than 8.5% abv.
Wine and made-wine: 65.94 69.32
exceeding 1.2% - not exceeding 4% abv.
Wine and made-wine: 90.68 95.33
exceeding 4% - not exceeding 5.5% abv.
Still wine and made-wine: 214.02 225.00
exceeding 5.5% - not exceeding 15% abv.
Wine and made-wine: 285.33 299.97
exceeding 15% - not exceeding 22% abv.
Sparkling wine and made-wine: 207.20 217.83
exceeding 5.5% - less than 8.5% abv.
Sparkling wine and made-wine: 274.13 288.20
8.5% and above - not exceeding 15% abv.

Gambling tax rates

As announced at the 2009 Pre-Budget Report, the rate of bingo duty is reduced to 20 per cent. Budget 2010 announces an increase in amusement machine licence duty and gaming duty bands in line with inflation. All other gambling tax rates remain unchanged.

Gambling tax rates 2009-10 2010-11
General betting duty 15 % 15 %
General betting duty - Sports 10% 10%
spread bets
General betting duty - 3% 3%
Financial spread bets
Bingo duty 22% 20%
Remote gaming duty 15% 15%
Pool betting duty 15% 15%
Lottery duty 12% of ticket value 12% of ticket value

Gaming Duty bands

Marginal Tax Rate 15% of first 20% of next 30% of next 40% on next
2009-10 bands £1,929,000 £1,329,500 £2,329,000 £4,915,500
2010-11 bands £1,975,000 £1,361,500 £2,385,000 £5,033,500

Casinos pay 50 per cent gaming duty on the remainder of their gross gaming yield.

Amusement Machine Licence Duty (AMLD) rates

Machine Annual licence cost 2009-10 Annual licence cost 2010-11
Category
A £5,625 £5,805
B1 £2,815 £2,905
B2 £2,215 £2,285
B3 £2,215 £2,285
B4 £2,010 £2,075
C £830 £860

Landline duty

Landline duty 2009-10 From 1 October 2010
Rate per fixed line N/A 50 pence

NOTES FOR EDITORS

Section 41 of the Tax Credits Act requires a report to be laid before Parliament each year reviewing the amounts of certain tax credit elements and thresholds. Section 145 of the Social Security Contributions and Benefits Act 1992 requires an annual review of Child Benefit rates. Section 150 of the Social Security Administration Act 1992 requires the weekly rate of Guardian's Allowance to be increased in line with prices.