Income tax rates and allowances
Tax rates and bands for the tax year 2008/09
Tax rate
Tax band
Basic rate: 20 per cent
£0-£34,800
Higher rate: 40 per cent
Over £34,800
From 2008/09, there is a 10 per cent starting rate for savings income only, with a limit of £2,320. If an individual’s taxable non-savings income is above this limit, then the 10 per cent starting rate for savings will not apply. There are no changes to the 10 per cent dividend ordinary rate or the 32.5 per cent dividend upper rate.
Income tax allowances
Type of allowance
Earnings for 2008/09
Personal allowance
£6,035
Personal allowance (aged 65-74) (1)
£9,030
Personal allowance (aged 75 and over) (1)
£9,180
Income limited for age-related allowances
£21,800
Married couple’s allowance for people born before 6 April 1935 (1) (2)
£6,535
Married couple’s allowance - aged 75 or over (1) (2)
£6,625
Income limit for age-related allowances
£21,800
Minimum amount of married couple’s allowance
£2,540
Blind person’s allowance
£1,800
(1) - These allowances reduce where the income is above the income limit by £1 for every £2 of income above the limit. They will never be less than the basic personal allowance or minimum amount of married couple’s allowance.
(2) - Tax relief for the married couple’s allowance is given at the rate of 10 per cent.
For more information or to discuss anything in this article feel free to contact Doug McLean via email or phone.
