Tax Rates

Inland Revenue Page for 13/14

Income tax allowances

2003-04 (£)

Item National Insurance Contributions

2003-04

Personal allowance

  4 615

Lower earnings limit, primary class 1

£77 per week

Personal allowance for people aged 65-74

  6 610

Upper earnings limit, primary class 1

£595 per week

Personal allowance for people aged 75 and over

  6 720

Primary threshold

£89 per week

Income limit for age-related allowances

18 300

Secondary threshold

£89 per week

Married couple’s allowance for people born before 6 April 1935 

  5 565

Employees’ primary class 1 rate

11% of £89.01 to £595 per week
1% Above £595 per week

Married couple’s allowance - aged 75 or more

  5 635

Employees’ contracted-out rebate

1. 6%

Minimum amount of married couple’s allowance

  2 150

Married women’s reduced rate

4.85%
1% Above £595 per week

Children’s tax credit

  5 290

Employers’ secondary Class 1 rate

12.8% on earnings above £89 per week

Children's tax credit - baby rate

10 490

Employers’ contracted-out rebate, salary-related schemes

3.5%

Blind person’s allowance

  1 480

Employers’ contracted-out rebate, money-purchase schemes  

1.0%

The rate of relief for the continuing married couple’s allowance
and maintenance relief for people born before 6 April 1935,
and for the children’s tax credit, is 10%.

 

Class 2 rate

£2.00 per week

Taxable bands

2003-04 (£)

Class 2 small earnings exception

£4,095 per year

Starting rate 10%

0 - 1 960

Special Class 2 rate for share fishermen

£2.65 per week

Basic rate 22%

1,961 - 30,500

Special Class 2 rate for volunteer development workers

£3.75 per week

Higher rate 40%

Over 30 500

Class 3 rate

£6.85 per week

Trust

2003-04

Class 4 rate

8% of £4,615 to £30,940 per year 1% above £30,940 per year

Trusts

34%

Class 4 lower profits limit

£4,615 per year

Schedule F Trusts

25%

Class 4 upper profits limit

£30,940 per year


Financial year 2003-04 (£)

Starting rate zero

0 - 10 000

The main rate of corporation tax for 2003-04 will be 30%.

Marginal relief

10 001 - 50 000

The corporation tax starting rate is reduced from 10 per cent to zero for companies with taxable profits below £10,000.
The small companies' rate is reduced from 20 to 19 per cent for companies with taxable profits between £50,000 and £300,000

Small companies’ rate 19%

50 001 - 300 000

Marginal relief eases the transition from the starting rate to the small companies' rate for companies with profits between £10,000 and £50,000.
The fraction used in the calculation of this marginal relief will be 19/400.
Marginal relief also applies to companies with profits between £300,000 and £1,500,000.

Marginal relief

300 001 - 1 500 000

The profits limits may be reduced for a company which is part of a group or has associated companies.
The lower rates and marginal reliefs do not apply to close investment holding companies.

Main rate 30%

1 500 001 or more

 

For the Taxation Year 2003-2004 the Chancellor has announced that Employer's NIC will rise by 1%
Employees National Insurance Contributions will also rise by 1% and that change will be without the upper ceiling.
This means 11% of £89.01 to £585 per week and then 1% from then onwards.


The obvious analysis of this is that larger corporations will bear the cost of these changes more than small companies.
Whether such corporations react by tightening any wage rises will become clear over time.
In the case of public sector employers there seems to be little scope but increase council tax to meet the Employer NIC demands.

These changes will hit the employee of the large corporation particularly hard, who will effectively be paying nearly a 3% charge. (1% as employee; 1% wage increase reduction; nearly 1% to cover public sector employers)
This seems to be the case with Council Tax bills rising by three to four times the rate of inflation.

Below Are Some Of The Corporation Taxation Points For A Small Company 2003-2004

Gross Profit

19%

[19/400]

Retained

Net Tax

  9999.00

1899.81

1899.81

  9999.00

     0.00

10000.00

1900.00

1900.00

10000.00

     0.00

10001.00

1900.19

1899.95

10000.76

     0.24

12000.00

2280.00

1805.00

11525.00

  475.00

15000.00

2850.00

1662.50

13812.50

1187.50

16000.00

3040.00

1615.00

14575.00

1425.00

18000.00

3420.00

1520.00

16100.00

1900.00

20000.00

3800.00

1425.00

17625.00

2375.00

22000.00

4180.00

1330.00

19150.00

2850.00

24000.00

4560.00

1235.00

20675.00

3325.00

25000.00

4750.00

1187.50

21437.50

3562.50

26000.00

4940.00

1140.00

22200.00

3800.00

28000.00

5320.00

1045.00

23725.00

4275.00

30000.00

5700.00

  950.00

25250.00

4750.00

32000.00

6080.00

  855.00

26775.00

5225.00

34000.00

6460.00

  760.00

28300.00

5700.00

36000.00

6840.00

  665.00

29825.00

6175.00

38000.00

7220.00

  570.00

31350.00

6650.00

40000.00

7600.00

  475.00

32875.00

7125.00

42000.00

7980.00

  380.00

34400.00

7600.00

44000.00

8360.00

  285.00

35925.00

8075.00

46000.00

8740.00

  190.00

37450.00

8550.00

48000.00

9120.00

   95.00

38975.00

9025.00

50000.00

9500.00

     0.00

40500.00

9500.00

50001.00

9500.19

     0.00

40500.81

9500.19

51000.00

9690.00

     0.00

41310.00

9690.00

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