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