2009-10 rates and allowances for VAT, Income tax, Capital Gains tax, Inheritance tax, Corporation tax on profits, National Insurance Contributions, the Working and Child Tax Credit, Guardian's Allowance, stamp taxes and duties, transfers of shares and stocks, tobacco and alcohol duties, gambling tax, fuel duties, vehicle excise duties and tax relief for business expenditure on cars are set out below.
Value Added Tax (VAT)
Current rate On and after 1 Jan 2010
Standard rate 15% 17.5%
A reduced rate of VAT of 5% will apply to children's car seat bases from 1 July 2009 (in line with the rate that already applies to children's car seats).
The registration threshold for VAT will rise to £68,000 from 1 May 2009.
Income tax, capital gains tax and inheritance tax
£ per year (unless stated) 2008-09 Change 2009-10
Income tax personal and
age-related allowances*
Personal allowance (age under 65) £6,035 +£440 £6,475
Personal allowance (age 65-74) £9,030 +£460 £9,490
Personal allowance (age 75 and £9,180 +£460 £9,640
over)
Married couple's allowance** (age £6,625 +£340 £6,965
75 and over)
Married couple's allowance** - £2,540 +£130 £2,670
minimum amount
Income limit for age-related £21,800 +£1100 £22,900
allowances
Blind person's allowance £1,800 +£90 £1,890
Capital gains tax annual exempt
amount
Individuals etc. £9,600 +£500 £10,100
Most trustees £4,800 +£250 £5,050
Individual inheritance tax £312,000 +£13,000 £325,000
allowance
Pension schemes allowances
Annual Allowance £235,000 +£10,000 £245,000
Lifetime Allowance £1,650,000 +£100,000 £1,750,000
*As announced at the 2008 Pre-Budget Report
**Married couple's allowance is given at the rate of 10 per cent
Income tax: taxable bands*
2008-09 £ per year 2009-10 £ per year
Starting savings 0-£2,320 Starting savings 0-£2,440
rate 10%** rate 10%**
Basic rate: 20% 0-£34,800 Basic rate: 20% 0-£37,400
Higher rate: 40% Over £34,800 Higher rate: 40% Over £37,400
*As announced at the 2008 Pre-Budget Report
** There is a 10p starting rate for savings income only. If an individual's non savings taxable income exceeds the starting rate limit, the 10p starting rate for savings will not be available for savings income
Corporation tax on profits
£ per year (unless stated) 2008-09 2009-10
£0 - £300,000 21 % 21 %*
£300,001 - £1,500,000 Marginal Relief Marginal Relief
£1,500,001 or more 28 % 28 %
* The 2008 Pre-Budget Report announced that a rise in the small companies' rate to 22% would be deferred until 2010-11.
National insurance contributions*
£ per week (unless stated) 2008-09 Change 2009-10
Lower earnings limit, primary Class 1 £90 +£5 £95
Upper earnings limit, primary Class 1 £770 +£74 £844
Upper Accruals Point N/A N/A £770
Primary threshold £105 +£5 £110
Secondary threshold £105 +£5 £110
Employees' primary Class 1 rate 11% - 11%
between primary threshold and upper
earnings limit
Employees' primary Class 1 rate above 1% - 1%
upper earnings limit
Employees' contracted-out rebate - 1.6% - 1.6%
salary-related schemes
Employees' contracted-out rebate - 1.6% - 1.6%
money-purchase schemes
Married women's reduced rate between 4.85% - 4.85%
primary threshold and upper earnings
limit
Married women's rate above upper 1% - 1%
earnings limit
Employers' secondary Class 1 rate 12.8% - 12.8%
above secondary threshold
Employers' contracted-out rebate, 3.7% - 3.7%
salary-related schemes
Employers' contracted-out rebate, 1.4% - 1.4%
money-purchase schemes
Class 2 rate £2.30 +£0.10 £2.40
Class 2 small earnings exception (per £4,825 +£250 £5,075
year)
Special Class 2 rate for share £2.95 +£0.10 £3.05
fishermen
Special Class 2 rate for volunteer £4.50 +£0.25 £4.75
development workers
Class 3 rate (per week) £8.10 +£3.95 £12.05
Class 4 lower profits limit (per £5,435 +£280 £5,715
year)
Class 4 upper profits limit (per £40,040 +£3,835 £43,875
year)
Class 4 rate between lower profits 8% - 8%
limit and upper profits limit
Class 4 rate above upper profits 1% - 1%
limit
* As announced at the 2008 Pre-Budget Report
Working and Child Tax Credits rates*
£ per year (unless stated) 2008-09 Change 2009-10
Working Tax Credit
Basic element £1,800 +£90 £1,890
Couple and lone parent element £1,770 +£90 £1,860
30 hour element £735 +£40 £775
Disabled worker element £2,405 +£125 £2,530
Severe disability element £1,020 +£55 £1,075
50+ Return to work payment (16-29 £1,235 +£65 £1,300
hours)
50+ Return to work payment (30+ £1,840 +£95 £1,935
hours)
Childcare element of the Working
Tax Credit
Maximum eligible cost for one £175 per - £175 per
child week week
Maximum eligible cost for two or £300 per - £300 per
more children week week
Percentage of eligible costs 80% - 80%
covered
Child Tax Credit
Family element £545 - £545
Family element, baby addition £545 - £545
Child element £2,085 +£150 £2,235
Disabled child element £2,540 +£130 £2,670
Severely disabled child element £1,020 +£55 £1,075
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 £15,575 +£465 £16,040
entitled to Child Tax Credit only
Income disregard £25,000 - £25,000
*As announced at the 2008 Pre-Budget Report
Guardian's Allowance rates from 6 April*
£ per week April 2008 Change April 2009
Guardian's Allowance £13.45 +0.65 £14.10
* As announced at the 2008 Pre-Budget Report
Stamp taxes and duties
Transfers of land and buildings (consideration paid)
The stamp duty land tax (SDLT) holiday, which exempts residential properties up to the value of £175,000 from SDLT, is extended until 31 December 2009.
From 1 January 2010, the zero and 1% rates apply as per the table below:
Rate Residential in Residential outside Non-residential
disadvantaged areas disadvantaged areas
Total value of
consideration
Zero £0 - £150,000 £0 - £125,000 £0 - £150,000
1% Over £150,000 - Over £125,000 - Over £150,000
£250,000 £250,000 - £250,000
3% Over £250,000 - Over £250,000 - Over £250,000
£500,000 £500,000 - £500,000
4% Over £500,000 Over £500,000 Over £500,000
Transfers of shares and stocks
The rate of stamp duty/stamp duty reserve tax on the transfer of shares and securities is unchanged at 0.5 per cent for 2009-10.
Tobacco duty rates
On 22 April 2009, tobacco duty rates will be:
Product Current Duty Duty on 22 April 2009
Cigarettes 24 per cent of the 24 per cent of the
retail price plus retail price plus
£112.07 per thousand £114.31 per thousand
cigarettes cigarettes
Cigars (per kilogram) £169.74 £173.13
Hand-rolling tobacco £122.01 £124.45
(per kilogram)
Other smoking tobacco £74.63 £76.12
and chewing tobacco
(per kilogram)
The impact of the tobacco duty changes is shown in the table below
Product Typical unit Excise duty including VAT at 15% on duty
Cigarettes (premium) Packet of 20 7 pence
Cigars Packet of 5 3 pence
Hand-rolling tobacco 25g 7 pence
Other smoking tobacco 25g 4 pence
and chewing tobacco
Alcohol duty rates
On 23 April 2009, duties on alcohol will be:
Current On 23 April 2009
Rate per litre of pure alcohol
Spirits £22.20 £22.64
Spirits-based ready to drink £22.20 £22.64
Wine and made-wine: Exceeding 22% £23.05 £22.64
abv
Rate per hectolitre per cent of
alcohol in the beer
Beer £16.15 £16.47
Rate per hectolitre of product
Still cider and perry: Exceeding £31.21 £31.83
1.2% - not exceeding 7.5% abv.
Still cider and perry: Exceeding £46.83 £47.77
7.5% - less than 8.5% abv.
Sparkling cider and perry: Exceeding £31.21 £31.83
1.2% - not exceeding 5.5% abv.
Sparkling cider and perry: Exceeding £203.14 £207.20
5.5% - less than 8.5% abv.
Wine and made-wine: Exceeding 1.2% - £64.65 £65.94
not exceeding 4% abv.
Wine and made-wine: Exceeding 4% - £88.90 £90.68
not exceeding 5.5% abv.
Still wine and made-wine: Exceeding £209.82 £214.02
5.5% - not exceeding 15% abv.
Wine and made-wine: Exceeding 15% - £279.74 £285.33
not exceeding 22% abv.
Sparkling wine and made-wine: £203.14 £207.20
Exceeding 5.5% - less than 8.5% abv.
Sparkling wine and made-wine: 8.5% £268.75 £274.13
and above - not exceeding 15% abv.
The impact of the alcohol duty changes is shown in the table below
Product Typical unit Excise duty including
VAT at 15% of the duty
Beer @ 4.2% abv pint 1p
Wine 75cl bottle 4p
Sparkling wine 75cl bottle 5p
Spirits @ 37.5% abv 70cl bottle 13p
Spirits-based ready 275ml bottle 1p
to drink
Cider & perry litre 1p
Gambling tax
From 4pm on 22 April 2009, rates of all categories of amusement machine licence duty (AMLD) will increase.
AMLD (£) Category Category Category Category Category Category
after A B1 B2 B3 B4 C
increase -
months for
which
licence
granted
1 500 255 200 200 180 80
2 985 490 385 385 350 145
3 1475 735 585 585 530 220
4 1965 985 775 775 705 290
5 2465 1230 970 970 875 365
6 2955 1475 1160 1160 1050 435
7 3445 1720 1355 1355 1225 505
8 3935 1965 1550 1550 1405 580
9 4430 2215 1745 1745 1580 655
10 4920 2465 1935 1935 1755 725
11 5410 2710 2130 2130 1930 795
12 5625 2815 2215 2215 2010 830
For accounting periods starting on or after 1 April 2009 gaming duty bands will be revalorised to the following:
Marginal Tax 15% of 20% of 30% of 40% of next*
Rate first next next
Current Bands £1,911,000 £1,317,000 £2,307,000 £4,869,500
Revalorised £1,929,000 £1,329,500 £2,329,000 £4,915,500
Bands
*50% will be charged on the remainder of Gross Gaming Yield
On 27 April 2009 participation fees for bingo and player-to-player gaming in casinos will no longer be subject to VAT.
For accounting periods starting on or after 27 April 2009 bingo duty will increase to 22%.
On 27 April 2009 player-to-player gaming in casinos will be brought into the gaming duty regime.
The Government will consult on moving the taxation of gaming machines onto a gross profits tax basis.
Fuel duties
Pence per Duty rate From 1 From 1
litre (unless pre-1 April September
stated) April 2009 2009* 2009
Change New duty Change New duty
rate rate
Ultra-low 52.35p +1.84p 54.19p +2p 56.19p
sulphur
petrol/diesel
Sulphur-free 52.35p +1.84p 54.19p +2p 56.19p
petrol/diesel
Biodiesel 32.35p +1.84p 34.19p +2p 36.19p
Bioethanol 32.35p +1.84p 34.19p +2p 36.19p
Liquefied 20.77p per +4.05p 24.82p +2.85p 27.67p per
petroleum gas kg per kg per kg per kg kg
used as road
fuel
Natural gas 16.60p per +2.66p 19.26 p +2.9p per 22.16p per
used as road kg per kg per kg kg kg
fuel
Rebated gas 10.07p +0.35p 10.42p +0.38p 10.80p
oil (red
diesel)
Fuel Oil 9.66p +0.34p 10.00p +0.37p 10.37p
*As pre-announced at Budget 2007 and confirmed at the 2008 Pre-Budget Report
Vehicle excise duty
Vehicle Excise Duty for Cars registered on or after 1 March 2001: 2009-10 and 2010-11 standard rates*
VED CO2 Change from Standard Standard
band emissions 2008-09 to rate rate
(g/km) 2009-10 2009-10** 2010-11**
A Up to 100 £0 £0 £0
B 101-110 £0 £35 £20
C 111-120 £0 £35 £30
D 121-130 £0 £120 £90
E 131-140 £0 £120 £110
F 141-150 +£5 £125 £125
G 151-165 +£5 £150 £155
H 166-175 +£5 £175 £180
I 176-185 +£5 £175 £200
J 186-200 +£5 £215 £235
K*** 201-225 +£5 £215 £245
L 226-255 +£5 £405 £425
M Over 255 +£5 £405 £435
* As announced at the 2008 Pre-Budget Report
**Alternative fuel discount: 2009-10, A-I £20, J-M £15; 2010-11 onwards, £10 all cars
***Includes cars emitting over 225g/km registered between 1 March 2001 and 23 March 2006
Vehicle Excise Duty for brand new Cars: 2010-11 first-year rates*
VED band CO2 emissions (g/km) First-year rate 2010-11**
A Up to 100 £0
B 101-110 £0
C 111-120 £0
D 121-130 £0
E 131-140 £110
F 141-150 £125
G 151-165 £155
H 166-175 £250
I 176-185 £300
J 186-200 £425
K 201-225 £550
L 226-255 £750
M Over 255 £950
* As announced at the 2008 Pre-Budget Report
**Alternative fuel discount: 2010-11 onwards, £10 all cars
Vehicle Excise Duty for Cars and Light Goods Vehicles registered before 1 March 2001: 2009-10 and 2010-11 rates*
VED band Change from 2008-09 2009-10 rate 2010-11 rate
to 2009-10
Up to 1549cc +£5 £125 £125
Over 1549cc +£5 £190 £205
* As announced at the 2008 Pre-Budget Report
Vehicle Excise Duty for Light Goods Vehicles registered on or after 1 March 2001: 2009-10 and 2010-11 rates*
VED band Change from 2008-09 2009-10 rate 2010-11 rate
to 2009-10
Euro 4** & 5*** +£5 £125 £125
discount rate
Standard rate +£5 £185 £200
*As announced at the 2008 Pre-Budget Report
**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 Motorcycles: 2009-10 rates*
VED band Change from 2008-09 2009-10
to 2009-10 rate
Up to 150cc - £15
151-400cc - £33
401-600cc - £48
Over 600cc - £66
*As announced at the 2008 Pre-Budget Report
Vehicle Excise Duty for Heavy Goods Vehicles and related vehicles: 2009-10 rates*
VED Change from Standard rate Reduced Pollution
band 2008-09 to 2009-10 2009-10 Certificate Rate 2009-10
A - £165 £160
B - £200 £160
C - £450 £210
D - £650 £280
E - £1,200 £700
F - £1,500 £1,000
G - £1,850 £1,350
* As announced at the 2008 Pre-Budget Report
DETAILS
Further details of changes in 2009-10 (and, where indicated, later years) are set out below:
Income tax
As announced at the 2008 Pre-Budget Report the personal allowance for under 65s will increase above indexation to £6,475.
Age related allowances have been increased in line with inflation to £9,490 for people aged between 65-74 and to £9,640 for those aged 75 and over. This will mean that in 2009-10 no one aged 65 or over need pay tax on an income of up to £183 a week.
The basic rate of tax will remain at 20p, and the higher rate of tax will remain at 40p.
National insurance contributions
As announced at the 2008 Pre-Budget Report the starting point for employers', employees' and self employed National Insurance Contributions (NICs) will increase in line with inflation to £110. The upper earnings and profits limits for Class 1 and Class 4 NICs respectively will increase from 2009 from £770 to £844 per week. For the self-employed, the rate of Class 2 contributions will increase to £2.40 a week.
Capital Gains Tax
The capital gains tax (CGT) annual exempt amount increased in line with statutory indexation to £10,100 for the tax year 2009-10 for individuals, personal representatives of deceased persons and trustees of certain settlements for the disabled. The annual exempt amount for most other trustees is increased to £5,050.
Every husband, wife, civil partner and child has his or her own £10,100 annual exempt amount.
For capital gains above the annual exempt amount the CGT rate for 2009-10 will continue to be 18 per cent.
Non-payable dividend tax credit
There is currently a one ninth non-payable dividend tax credit available for UK individuals receiving dividends from UK resident companies or from shareholdings of less than 10 per cent in foreign companies. For these individuals, higher rate taxpayers are liable to tax at 32.5 per cent but in practice only pay 25 per cent (of the net dividend) because part of the tax liability is covered by the tax credit. Basic rate taxpayers are liable to tax at 10 per cent but in practice do not pay any tax on dividends from UK companies because the tax liability is entirely covered by the tax credit.
As announced at Budget 2008, the non-payable dividend tax credit will be extended from 22 April 2009 to investors with a shareholding of 10 per cent or more in a non-UK resident company, unless the source country does not levy a tax on corporate profits similar to corporation tax. The credit will also be extended to all dividends from offshore funds, except for distributions from offshore funds with more than 60 per cent of interest bearing assets, which will be taxed as interest.
Inheritance Tax
As announced in Budget 2006, the inheritance tax allowance increased in 2009-10 to £325,000 for individuals or £650,000 for married couples and civil partners. The value of estates over and above the allowance is taxed at 40 per cent. The proportion of estates left on death in 2009-10 which are expected to be liable for inheritance tax is 2 per cent.
Child Benefit
At Budget 2008, it was announced that in April 2009 the Child Benefit eldest/only child rate would increase above inflation to £20.00, and the rate for other children would increase in line with inflation to £13.20. At the 2008 Pre-Budget Report, these rises were brought forward from April 2009 to January 2009.
Child and Working Tax Credits rates
As announced at the 2008 Pre-Budget Report, on 6 April 2009 all elements of the Working Tax Credit (WTC), apart from the childcare element, increased in line with inflation. 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%.
As announced at the 2008 Pre-Budget Report, the child element of the Child Tax Credit (CTC) increased by £75 above average earnings indexation. This included the Government's commitment to increase the child element by £50 above indexation in April 2009, and also brought forward the Government's commitment to increase the child element by £25 above indexation in April 2010 to April 2009. The elements for disabled children and severely disabled children increased in line with inflation. The family element and baby addition remain unchanged.
As announced at the 2008 Pre-Budget Report, the income threshold for receiving maximum CTC only increased to £16,040, equivalent to the effective threshold for lone parents and couples receiving both WTC and CTC. The threshold for receiving maximum WTC remains at £6,040, 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%, and for the rest of tax credits at 39%. The disregard for changes in income during the tax year remains at £25,000.
Stamp duty land tax (SDLT)
On the 2 September 2008 a SDLT holiday was announced, increasing the starting rate of SDLT for residential property to £175,000. This was due to expire on 3 September 2009. Budget 2009 announces that this will be extended until 31 December 2009.
Vehicle excise duty (VED)
Changes to this year's VED rates will take effect from 1 May 2009.
On 1 May 2009, new emissions based VED bandings will be introduced for all cars registered on or after 1 March 2001. Full rates are set out in the table above.
Both VED rates for cars and light goods vehicles registered before 1 March 2001 will increase by £5 in 2009. In 2010, the higher rate will increase by £15 and the lower rate will be frozen.
The standard VED rate for light goods vehicles registered on or after 1 March 2001 will increase by £5 in 2009. The discounted rate for eligible light goods diesel vehicles achieving early compliance with Euro 4 and 5 emissions standards will also be increased by £5. In 2010, the standard rate will be increased by £15 and the discounted rate will be frozen.
VED rates for motorbikes, Heavy Goods Vehicles (HGVs), Special Types Vehicles, Combined Transport vehicles and all related vehicles will be frozen in 2009.
Tax relief for business expenditure on cars
New rules for tax relief for business expenditure on cars were announced on 1 April. These take effect from 1 April 2009 for businesses in the charge to Corporation Tax and 6 April 2009 for businesses in the charge to Income Tax. The rate at which qualifying expenditure on cars can be written down against profits will depend on the car's CO2 emissions. Expenditure on cars with CO2 emissions exceeding 160 g/km will be allocated to the special rate capital allowances pool and attract 10% writing-down allowance (WDA). Expenditure on cars with CO2 emissions of 160g/km or less will attract 20% WDA in the main plant and machinery pool. The associated rules which disallow a proportion of car lease rental payments have also been amended in line with the new capital allowances rules.
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