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Tax Rates 2004/2005
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INCOME TAX RATES
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Income Tax Rates
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2004/05
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2003/04
|
Band
£ |
Rate
%
|
Band
£ |
Rate
%
|
| 0 - 2,020 |
10
|
0 - 1,960 |
10
|
| 2,021 - 31,400 |
22 *
|
1,961 - 30,500 |
22 *
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| Over 31,400 |
40 **
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Over 30,500 |
40 **
|
* Except dividends (10%) and savings income (20%).
** Except dividends (32.5%).
Other income taxed first, then savings income and finally dividends. |
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INCOME TAX RELIEFS
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Income Tax Reliefs
|
|
2004/05
£
|
2003/04
£
|
| Personal allowance |
- under 65 |
4,745
|
4,615
|
|
- 65 - 74 * |
6,830
|
6,610
|
|
- 75 and over * |
6,950
|
6,720
|
| Married couple's allowance |
- aged less than 75 and born before 6.4.35 * |
5,725
|
5,565
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|
- 75 and over |
5,795
|
5,635
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- min. amount |
2,210
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2,150
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| * Age allowance income limit |
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18,900
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18,300
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(reduce age allowance by £1 for every £2 of excess income over £18,900)
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| Blind person’s allowance |
|
1,560
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1,510
|
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PENSION PREMIUMS
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Pension Premiums
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|
% of Net Relevant Earnings (NRE) 2004/05 and 2003/04
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| Age at the beginning of the tax year |
* Personal Pensions
(including stakeholder)
|
Retirement
Annuities
|
35 or less
36 - 45
46 - 50
51 - 55
56 - 60
61 - 74
|
17.5
20
25
30
35
40
|
17.5
17.5
17.5
20
22.5
27.5
|
*Maximum contributions 2004/05 and 2003/04: higher of
- £3,600 (gross)
- % of NRE capped at £102,000 in 2004/05 (2003/04 £99,000) |
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CAR AND FUEL BENEFITS
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Car and Fuel Benefits
Company cars 2004/05
|
| CO2 emissions (g/km) (round down to nearest 5g/km) |
% of car’s list price taxed |
Fuel benefit (£14,400 x %) |
up to
145 |
15 |
2,160 |
| 150 |
16 |
2,304 |
| 155 |
17 |
2,448 |
| 160 |
18 |
2,592 |
| 165 |
19 |
2,736 |
| 170 |
20 |
2,880 |
| 175 |
21 |
3,024 |
| 180 |
22 |
3,168 |
| 185 |
23 |
3,312 |
| 190 |
24 |
3,456 |
| 195 |
25 |
3,600 |
| 200 |
26 |
3,744 |
| 205 |
27 |
3,888 |
| 210 |
28 |
4,032 |
| 215 |
29 |
4,176 |
| 220 |
30 |
4,320 |
| 225 |
31 |
4,464 |
| 230 |
32 |
4,608 |
| 235 |
33 |
4,752 |
| 240 |
34 |
4,896 |
245
and above |
35 |
5,040 |
Company cars
- For diesel cars add a 3% supplement, but maximum still 35%.
- Discounts apply to certain environmentally friendly cars.
- For cars registered before 1.1.98 charge is based on engine size.
- 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.
- Payments made by employees may reduce the benefits.
Fuel benefits
- 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.
| Van benefit per vehicle - 2004/05 and 2003/04 |
Vehicles under 4 years old
£500 |
Vehicles at least 4 years old
£350 |
Notes
1. The age is determined at the end of the tax year.
2. Van benefits include fuel for private use. |
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MILEAGE ALLOWANCE PAYMENTS
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Mileage Allowance Payments
| Cars and vans |
2004/05 and 2003/04 Rate per mile
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| Up to 10,000 miles |
40p |
| Over 10,000 miles |
25p
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| Bicycles |
20p
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| Motorcycles |
24p |
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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INDIVIDUAL SAVINGS ACCOUNTS
(ISAs)
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Individual Savings Accounts (ISAs)
|
2004/05 and 2003/04
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£
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| Overall investment limit |
- maxi ISA
|
7,000
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- mini ISA
|
3,000
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- mini cash ISA
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3,000
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CORPORATION TAX
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Corporation Tax
|
Years to 31.3.05 and 31.3.04 |
|
Profits Band
£
|
Rate
%
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| Starting rate |
0 - 10,000
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0*
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Marginal (starting) rate
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10,001 - 50,000
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23.75
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| Small companies rate |
50,001 - 300,000
|
19
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| Marginal (small companies) rate |
300,001 - 1,500,000
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32.75
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| Full rate |
Over 1,500,000
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30
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| Starting rate fraction |
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19/400
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| Small companies fraction |
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11/400
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*With effect from 1 April 2004, minimum rate of 19% will apply when profits are distributed to non-company shareholders.
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
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Capital Allowances
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Writing Down Allowance |
| Plant and Machinery* |
25%#(reducing balance) |
| Motor Cars** |
25% (reducing balance) - £3,000 max |
| Industrial and Agricultural Buildings and Hotels |
4% (straight line) |
*For small businesses: first year allowances (FYAs) of 40% on expenditure until 5.4.04 (31.3.04 for companies).
FYAs of 50% for 12 months from 6.4.04 (1.4.04 for companies). 100% FYAs between 1.4.00 and 31.3.04 on computers, software and internet-enabled mobile phones.
For medium-sized businesses: FYAs of 40%.
For all businesses: 100% FYAs on expenditure on energy saving plant and machinery from 1.4.01. **100% FYAs on new cars with CO2 emissions not exceeding 120 gm/km from 17.4.02.
#6% on certain long life assets. |
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VALUE ADDED TAX
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Value Added Tax
| Standard Rate |
17.5% |
| Lower Rate |
5% |
Annual Registration Limit - from 1 April 2004
(10.4.03 - 31.3.04 £56,000) |
£58,000 |
VAT on private fuel - scale charge due per quarter per car for accounting periods beginning on or after 1 May 2004.
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Petrol
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Diesel
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Charge
£
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VAT
£
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Charge
£
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VAT
£
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| Up to 1400cc |
232
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34.55
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216
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32.17
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| 1401 - 2000cc |
293
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43.63
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216
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32.17
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Over 2000cc
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432
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64.34
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273
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40.65
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CAPITAL GAINS TAX
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Capital Allowances
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Writing Down Allowance |
| Plant and Machinery* |
25%#(reducing balance) |
| Motor Cars** |
25% (reducing balance) - £3,000 max |
| Industrial and Agricultural Buildings and Hotels |
4% (straight line) |
*For small businesses: first year allowances (FYAs) of 40% on expenditure until 5.4.04 (31.3.04 for companies).
FYAs of 50% for 12 months from 6.4.04 (1.4.04 for companies). 100% FYAs between 1.4.00 and 31.3.04 on computers, software and internet-enabled mobile phones.
For medium-sized businesses: FYAs of 40%.
For all businesses: 100% FYAs on expenditure on energy saving plant and machinery from 1.4.01. **100% FYAs on new cars with CO2 emissions not exceeding 120 gm/km from 17.4.02.
#6% on certain long life assets. |
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INHERITANCE TAX
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Inheritance Tax
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Chargeable Transfers
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Death Rate
%
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Lifetime Rate
%
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2004/05
£’000
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2003/04
£’000
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Nil
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Nil
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0 - 263
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0 - 255
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40
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20
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Over 263
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Over 255
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| Reliefs |
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| Annual exemption |
£3,000 |
Marriage |
- parent |
£5,000 |
| Small gifts |
£250 |
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- grandparent |
£2,500 |
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- bride/groom |
£2,500 |
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- other |
£1,000 |
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| Reduced charge on gifts within seven years of death |
| Years before death |
0-3
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3-4
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4-5
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5-6
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6-7
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| % of death charge |
100
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80
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60
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40
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20
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STAMP DUTY
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Stamp Duty & Stamp Duty Land Tax
| Shares and securities |
0.5% |
Other property |
|
| Up to £60,000* |
Nil |
| £60,001 - £250,000 |
1% |
| £250,001 - £500,000 |
3% |
| Over £500,000 |
4% |
*From 1.12.03 Nil rate upper threshold on commercial property increased to £150,000.
Disadvantaged areas
Residential property:
exemption up to £150,000 from 30.11.01
Commercial property:
exemption up to £150,000 from 30.11.01 to 9.4.03
exemption without limit from 10.4.03 |
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NATIONAL INSURANCE
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National Insurance
Class 1 (employed)
(contracted in) |
2004/05 Rates |
| Weekly earnings |
Employer
|
Employee
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| Up to £91 |
Nil*
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Nil*
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£91.01 - £610
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12.8%**
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11%**
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| Over £610 |
12.8%**
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£57.09 +1%***
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* Entitlement to contribution-based benefits retained for earnings between £79.01 and £91 per week.
** On earnings above £91.
*** On earnings above £610. |
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| Class 1A (employers) |
12.8% on employee taxable benefits |
| Class 1B (employers) |
12.8% on PAYE Settlement Agreements |
| Class 2 (self-employed) |
flat rate per week £2.05
small earnings exception p.a. £4,215 |
| Class 3 (voluntary) |
flat rate per week £7.15 |
| Class 4 (self-employed) |
8% on profits between £4,745 and £31,720 plus 1% on profits over £31,720 |
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MAIN SOCIAL SECURITY BENEFITS
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Main Social Security Benefits
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Weekly Benefit
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2004/05
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2003/04
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| Basic retirement pension |
- single person |
£79.60
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£77.45
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- married couple |
£127.25
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£123.80
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| Statutory pay rates - Average weekly earnings £79 (£77) or over |
| Statutory Sick Pay |
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£66.15
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£64.35
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| Statutory Maternity Pay |
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| - first six weeks |
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90% of weekly earnings
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| - next 20 weeks |
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£102.80*
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£100.00*
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| Statutory Paternity Pay - two weeks |
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£102.80* |
£100.00* |
| Statutory Adoption Pay - 26 weeks |
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£102.80* |
£100.00* |
| * Or 90% of weekly earnings if lower |
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| SELF ASSESSMENT KEY DATES |
Self Assessment: Key Dates 2004/05
31 July 2004 - Second payment on account for 2003/04.
30 September 2004 - Deadline for submission of paper tax returns for Inland Revenue calculation; and where the taxpayer wants a balancing payment (below £2,000) collected through their 2005/06 PAYE code.
5 October 2004 - Deadline for notifying Inland Revenue of new sources of income if no tax return has been issued for 2003/04.
30 December 2004 - Deadline for submission of tax returns over the internet; and where the taxpayer wants a balancing payment (below £2,000) collected through their 2005/06 PAYE code.
31 January 2005 - Deadline for filing tax returns for 2003/04.
Balancing payment due for 2003/04. First payment due for 2004/05.
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Disclaimer
The information in this tax card is based upon the 2004 Budget and other earlier announcements and may be subject to amendment by the Finance Act.
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Whether you are based in London or elsewhere please contact us to discuss how
Learer Roberts Chartered Accountants can help you, for
more information or to arrange a no obligation meeting.
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