Mileage Allowance Payments
Mileage Allowance Payments                                                      Return to top
Cars and vans               2011/12
Rate per mile
Up to 10,000 miles           45p (40p 2010/11 and 2009/10)
Over 10,000 miles            25p
Bicycles                           20p
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.

Passenger Payments

5p per passenger per business mile for carrying fellow employees in a car or van on journeys which are also work journeys for them. Only payments specifically for carrying passengers count and there is no relief if you receive less than 5p or nothing at all.

 
Capital allowances
Capital gains tax    
Car & fuel benefits    
Corporation tax
Stamp duty
Pension premiums
Income tax rates    
Income tax reliefs
Inheritance tax    
ISAs
National insurance
VAT
VAT Fuel Scale Charges
Capital Allowances:                                                                   Return to top

Plant and machinery - Annual Investment Allowance (AIA)

The AIA gives a 100% write-off on most types of plant and machinery costs, including integral features and long life assets but not cars, of up to 25,000 p.a. from 6 April 2012 (1 April 2012 for companies) The limit is decreased from 100,000 for expenditure incurred on or after 6 April 2010 (1 April 2010 for companies). Special rules apply for accounting periods straddling these dates.

Any costs over the AIA fall into the normal capital allowance pools at either 10% or 20%. The AIA may need to be shared between certain businesses under common ownership.

Other plant and machinery allowances
The annual rate of allowance is 20%. A 10% rate applies to expenditure incurred on integral features and on long life assets.

A temporary 40% first year allowance may be due for certain expenditure exceeding the AIA incurred in the 12 month period beginning on 6 April 2009 (1 April 2009 for companies). A 100% first year allowance may still be available on certain energy efficient plant and cars.

Cars
For expenditure incurred on cars on or after 6 April 2009 (1 April 2009 for companies), costs are generally allocated to one of the two plant and machinery pools. Cars with CO2 emissions not exceeding 160gm/km receive a 20% allowance p.a. Cars with CO2 emissions over 160gm/km receive a 10% allowance p.a.

Industrial and agricultural buildings and hotels
The annual rate of allowance is 1% (2%) from 6 April 2010 (1 April 2010 for companies). Special rules apply for accounting periods straddling these dates.
 

 

Capital Gains Tax:                                                                          Return to top

2011/12  
Individuals                                 
Exemption                         10,600 
Balance of gains                 18% 
Higher rate*                       28%
Trust
Exemption                         5,300 
Rate                                    28%
*For higher and additional rate taxpayers

2010/11                        6.4.10 - 22.6.10                    23.6.10 - 5.4.11
Individuals                                                                         
Exemption                         10,100                                     10,100
Balance of gains                 18%                                          18%
Higher rate*                         -                                              28%
Trust
Exemption                         5,050                                        5,050
Rate                                    18%                                         28%
*For higher and additional rate taxpayers

Entrepreneurs' Relief
The first 5m (2m for disposals on/after 6 April 2010 and before 23 June 2010) of qualifying gains are charged at an effective rate of 10%. Gains in excess of the limit are charged at the rates detailed above.    
                                                                                                        
                                                                                                            
 
Van and fuel benefit per vehicle 2011/12

                                             Van           Fuel              Total
Tax (20% tax payer)                600            110                 710
Tax (40% tax payer)             1,200            220               1,420
Tax (50% tax payer)             1,500            275               1,775
Employers Class 1A NIC           414           75.90             489.90

The flat rate of £3,000 is reduced to nil for vans which cannot produce C02 engine emissions under any circumstances when driven. There is no fuel benefit for such vans.


Corporation Tax:

Years starting to 1.4.11

                                                      Profits band                    Rate
                                                                                            %
Small companies rate                     0 - 300,000                         20*
Full rate                                        Over 1,500,000                    26*
Small companies fraction                                                       3/200*

Years starting 1.4.10 and 1.4.09

                                                      Profits band                    Rate
                                                                                            %
Small companies rate                     0 - 300,000                         21*
Full rate                                        Over 1,500,000                    28*
Small companies fraction                                                       7/400*

The profits limits are reduced for accounting periods of less than 12 months and for a company with associated companies.

*Different rates apply for ring-fenced (broadly oil industry) profit.
 
Income Tax Rates:                                                                       Return to top
2011/12                    2010/11
Band                         Band              Rate %
0 - 2,440                    0 - 2,440                10*
2,441 - 35,000            2,441 - 37,400        20**
35,001 - 150,000        37,401 - 150,000     40***
Over 150,000               Over 150,000         50****

*Only applicable to dividends and savings income. The 10% rate is not available if taxable non-savings income exceeds 2,440.

** Except dividends (10%).
*** Except dividends (32.5%).
**** Except dividends (42.5%).

Other income taxed first, then savings income and finally dividends.

Income Tax Relief

2011/12

Personal allowance 

- under 65            7,475
- 65 - 74*            9,940
- 75 and over*    10,090

Married couple's allowance (relief at 10%)

- 75 and over*                               7,295

- min. amount                                 2,800
* Age allowance income limit         24,000
(Reduce age allowance by 1 for every 2 of excess income over 24,000.)    
Blind person's allowance                 1,980
 
 
Inheritance Tax:
Death rate                        Lifetime rate       Chargeable transfers
      %                                        %                         2011/12
                                                                               '000
      Nil                                         Nil                         0 - 325*
      40                                         20                         Over 325*

*Potentially increased for surviving spouses or civil partners who die on or after 9 October 2007.

Reliefs
Annual exemption     3,000                 Marriage     - parent     5,000
Small gifts                 250                                    - grandparent     2,500
                                                                           - bride/groom     2,500
                                                                           - other     1,000

Reduced charge on gifts within seven years of death
Years before death     0-3     3-4     4-5     5-6     6-7
% of death charge     100     80        60     40     20
 
Individual Savings Accounts (ISAs)                                           Return to top
2011/12                                           
Overall annual investment limit           10,680
Comprising     - cash up to                 5,340 max.
      - balance in stocks and shares     10,680 max.
 
Pension Premiums

    * 2010/11 and 2009/10

 
National Insurance:                                                                   Return to top

Class 1 (employed)
contracted in                                          2011/12 Rates
Weekly earnings                                     Employer     Employee
Up to 139                                             Nil*                Nil*
139.01 - 817                                      12.8%**       12%**
Over 817                                             12.8%**       80.74 +1%***

* Entitlement to contribution-based benefits retained for earnings between 102.01 139 per week.
** On earnings above 139.
*** On earnings above 817.

Class 1A (employers)                13.8% on employee taxable benefits
Class 1B (employers)                12.8% on PAYE Settlement Agreements
Class 2 (self-employed)            flat rate per week 2.50
small earnings exception p.a.   5.315 p.a.
Class 3 (voluntary)                   flat rate per week 12.65
Class 4 (self-employed)            9% on profits between 57,225 and 43,875 plus 2% on profits over 42,475
 

Stamp Duty & Land Tax:

Land and buildings (on full consideration paid)
Rate         Residential property*                                 Non-residential
                 Disadvantaged areas             Other  
                                                                                            
Nil                    0 - 150,000                 0 - 125,000                0 - 150,000
1%*             150,001 - 250,000*     125,001 - 250,000*     150,001 - 250,000
3%               250,001 - 500,000       250,001 - 500,000       250,001 - 500,000
4%               500,001 - 1,000,000    500,001 - 1,000,000    500,000 - 1,000,000
5%                 over 1,000,000           over 1,000,000            over 1,000,000

* Relief available for first time buyers for transactions with an effective date on or after 25 March 2010 and before 25 March 2012.

Shares and securities - rate 0.5%.

 
Value Added Tax :
Standard rate     20% and 0%
Reduced rate      5%
Annual Registration Limit    - from 1.4.11 (1.5.10 - 31.3.11 70,000)  73,000
Annual Deregistration Limit - from 1.4.11 (1.5.10 - 31.3.11 68,000)  71,000
 

VAT Fuel Scale Charges

Where businesses buy fuel which has some degree of private use, they must account for output VAT on a scale charge which is based on the CO2 emissions.

These are the charges which apply from the start of the first prescribed accounting period beginning on or after 1 May 2011.

 
CO2 band
VAT fuel
scale charge,
12 month period
VAT fuel
scale charge,
3 month period
VAT fuel
scale charge,
1 month period

120 or less
630
157
52
125 - 129
945
236
78
130 - 134
1,010
252
84
135 - 139
1,070
268
89
140 - 144
1,135
283
94
145 - 149
1,200
299
99
150 - 154
1,260
315
105
155 - 159
1,325
331
110
160 - 164
1,385
346
115
165 - 169
1,450
362
120
170 - 174
1,515
378
126
175 - 179
1,575
394
131
180 - 184
1,640
409
136
185 - 189
1,705
425
141
190 - 194
1,765
441
147
195 - 199
1,830
457
152
200 - 204
1,890
472
157
205 - 209
1,955
488
162
210 - 214
2,020
504
168
215 - 219
2,080
520
173
220 - 224
2,145
536
178
225 or more
2,205
551
183
 
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Car & Fuel Benefits:
Company cars 2011/12
CO2 emissions (gm/km)
                               Petrol %            Diesel %
up to 75                          5                      8
76 to 120                      10                     13
121 to 129                     15                    18
130 to 134                     16                    19
135 to 139                     17                    20
140 to 144                     18                    21
145 to 149                     19                    22
150 to 154                     20                    23
155 to 159                     21                    24
160 to 164                     22                    25
165 to 169                     23                    26
170 to 174                     24                    27
175 to 179                     25                    28
190 to 184                     26                    29
185 to 189                     27                    30
190 to 194                     28                    31
195 to 199                     29                    32
200 to 204                     30                    33
205 to 209                     31                    34
210 to 214                     32                    35
215 to 219                     33                    35
220 to 224                     34                    35
225 and above               35                    35

Reliable emissions data is not widely available for cars registered before 1 January 1998. For them, the following taxable percentages apply, regardless of fuel type:

upto 1400cc                    15  
1401 to 2000 cc               22
2000cc and above            32

Car fuel benefit

The taxable car fuel benefit, for 2011/12, is calculated by multiplying £18,800 by the same percentage as applies (or would apply) for the car benefit.

If the employee pays for the full cost of all fuel for private journeys (usually including home to work) there will be no car fuel benefit. In all other cases the full tax charge will be due.

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