Elson Geaves Accountancy | Income Tax Rates and Allowances
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Income Tax Rates and Allowances

Income Tax Rates and Allowances

Table A   Allowances and Reliefs

 

2014/15 2013/14
Allowed at top rate of tax
Personal Allowance (PA) £10,000 £9,440
Personal Allowance (born 6.4.38 – 5.4.48)* 10,500 10,500
Personal Allowance (born before 6.4.38)* 10,660 10,660
Blind Person’s Allowance 2,230 2,160
Allowed only at 10%
Married Couple’s Allowance (MCA)*
only available if born before 6.4.35
8,165 7,915
Income limit for age-related allowances 27,000 26,100

 

*Age-related allowances are reduced £1 for every £2 by which income exceeds the income limit. PA is reduced before MCA, to a minimum of £10,000 (2013/14: £9,440). MCA is reduced to a minimum of £3,140 (2013/14: £3,040).

 

PA is withdrawn at £1 for every £2 by which total income exceeds £100,000. PA is reduced to nil if income is £120,000 or more (2013/14: £118,880).

 

Bands 2014/15 2013/14
Basic 31,865 32,010
Higher 31,866-150,000 32,011-150,000
Additional over 150,000 over 150,000

 

Rates differ for General, Savings and Dividend income within each band:

 

Rates 2014/15 unchanged from 2013/14
G S D
Basic 20% 20% 10%
Higher 40% 40% 32.5%
Additional 45% 45% 37.5%

 

General income (salary, pensions, profit, rent) uses starting, basic and higher rate bands before savings income (interest). Dividends are taxed as the ‘top slice’ of income.

 

If taxable general income is less than £2,880 (2013/14: £2,790), savings income is taxed at a ‘starting rate’ of 10% until total taxable income exceeds that limit. This ‘starting rate band’ is part of the basic rate band.

 

Table B   Pension Contributions

 

The maximum annual tax-efficient gross contributions (up to age 75) in 2014/15 are:

 

– individuals: the higher of £3,600 or 100% of earnings, to max. £40,000
– employers: £40,000 less employee contributions

 

Only current earnings count for the 100% limit. If less than the max. (£50,000 up to 2013/14) has been paid in any of the preceding three years, it may be possible to increase the current contributions by the shortfall. Maximum tax-efficient fund (lifetime allowance) where benefits are taken in 2014/15: £1.25m, unless ‘protection’ is claimed for an existing fund.

 

Table C   Car and Fuel Benefits

 

Car Benefit Assessment 2014/15

 

Charge based on a percentage of the initial list price of the car; the percentage depends on the carbon dioxide emission ratings of the car, if it has one. For older cars without a rating, the percentage depends on engine capacity.

 

For 2014/15 the percentage for a petrol engine is :

 

no emissions no tax charge
1g/km-75g/km 5%
76g/km-94g/km 11%
95g/km-99g/km 12%, then + 1% at 100g/km, 105g/km etc.
210g/km and above 35% (maximum)

 

Diesel cars have 3% added to the figure for a similarly-rated petrol car, but still have a maximum charge of 35% (which applies at 195g/km).

 

Car Fuel Assessment

 

The benefit is calculated using the same percentage as that used for the car benefit, applied to a standard figure of £21,700 (2013/14: £21,100).

 

The taxable amount is therefore between £1,085 (5% – min.) and £7,595 (35% – max.).

 

There is no tax on charging a zero-emissions electric car.