Keeping you informed

• Introduction
• Income Tax
• Capital Gains Tax
• Corporation Tax
• Main Capital Allowances
• Value Added Tax
• Inheritance Tax
• Vehicle Benefits
• Mileage Allowances
• National Insurance Contributions
• Key Dates & Deadlines
• Pension Premiums
• Savings and Investments
• Stamp Taxes

Introduction

Our Tax Rates Centre provides a summary of some of the essential tax rates, dates and figures for 2013/14 - alternatively you may wish to download our pdf version Tax Rate Card

2013/14 Tax Rates Information is for guidance only and professional advice should be obtained before acting on any information contained as no responsibility can be accepted for loss occasioned as a result of action taken or refrained from in consequence of its contents.

Income Tax

Income tax rates	Note	2013/14	2012/13
Basic rate band - income up to		£32,010	£34,370
Starting rate for savings		*10%	*10%
Basic rate		20%	20%
Dividend ordinary rate		10%	10%
Higher rate - income over		£32,010	£34,370
Higher rate		40%	40%
Dividend upper rate		32.5%	32.5%
Additional rate - income over		£150,000	£150,000
Additional rate		45%	50%
Dividend additional rate		37.5%	42.5%
* Starting rate is for savings income up to the starting rate limit of £2,790 (£2,710) within the basic rate band. The rate applies to any balance of the limit remaining after allocating taxable non-savings income.
Trusts
For interest in possession trusts on all income, and other trusts on the first £1,000 of income ("standard rate band"):
dividend ordinary rate	5	10%	10%
savings income	5	20%	20%
other income	5	20%	20%
Income of other trusts above £1,000 is taxed at the special trust rates:
rate applicable to trusts		45%	50%
dividend trust rate		37.5%	42.5%
Personal allowance (PA)
Born after 5 April 1948 / under 65 †	1,4	£9,440	† £8,105
Born after 5 April 1938 and before 6 April 1948 / 65-74 †	1,2,4	£10,500	† £10,500
Born before 6 April 1938/ 75 and over †	1,2,4	£10,660	† £10,660
Blind person's allowance		£2,160	£2,100
Married couple's allowance (MCA)
Either partner born before 6 April 1935 (relief restricted to 10%)	1,3,4	£7,915	£7,705
Tax Shelters
Venture Capital Trust (VCT) up to		£200,000	£200,000
Enterprise Investment Scheme (EIS) up to		£1,000,000	£1,000,000
Seed Enterprise Investment Scheme up to		£100,000	£100,000
Golden Handshake max.		£30,000	£30,000
Rent a Room - exempt on gross annual rent up to		£4,250	£4,250
Construction Industry Scheme deduction rate:
Standard (registered)		20%	20%
Higher (not registered)		30%	30%

Notes

1. Ages are as the end of the tax year.
2. The higher rates of personal allowances are reduced by £1 for each £2 of excess income over £26,100 (£25,400) until the basic allowance is reached.
3. Similar limits apply to the married couple's allowance. The reduction in allowance is subject to a minimum level of £3,040. (For couples married before 5 December 2005, only the husband's income is taken into account. For those married on or after 5 December 2005 or in a civil partnership, only the higher earner’s income is taken into account).
4. The personal allowance, including the minimum age-related allowance, is reduced by £1 for every £2 that net adjusted income exceeds £100,000.
5. Where there are several trusts created by the same settlor, the "standard rate band" is divided equally between them, subject to a minimum band of £200 for each trust.

Capital Gains Tax

Capital gains tax rates and bands for 2013/14
On chargeable gains
Total taxable gains and income: up to £32,010 from £32,011	18% 28%
Annual exemption
- individual	£10,900
- most trustees	£5,450
Chattels exemption
(proceeds per item or set)	£6,000

 

Entrepreneurs' Relief

Qualifying gains will be taxed at 10%. Claims may be made on more than one occasion up to a “lifetime” total of £10 million.

Notes

1. Transfers between husband and wife or civil partners living together are generally exempt.

Capital gains of all trusts for 2013/14 are taxed at the rate of 28%. Where there are several trusts created by the same settlor, the annual exemption is divided equally between them, subject to a minimum exemption of £1,090 for each trust.

Corporation Tax

Corporation tax rates and bands are as follows:

Financial Year to	31 March 2013	31 March 2012
Taxable profits
First £300,000	20%	20%
Next £1,200,000	25%	27.5%
Over £1,500,000	24%	26%

Capital Allowances

Plant and Machinery:

Investment for use in Enterprise Zones, energy saving and environmentally beneficial equipment, new zero-emission goods vehicles, low CO2 emission (up to 95g/km) cars, natural gas/hydrogen refuelling equipment: First year allowance.	100%
Annual investment allowance (AIA) – on first £250,000 of investment (excludes cars and other expenditure already qualifying for 100% FYA)	100%*
Writing down allowance on expenditure not qualifying for AIA or FYA:
Long-life assets, integral features of buildings, cars over 130g/km	8%
Other plant and machinery	18%
Business premises renovation: max initial allowance	100%

* Transitional rules may apply

Value Added Tax

From	1 April 2013
Standard rate	20%
VAT fraction	1/6
Reduced rate	5%
Taxable Turnover Limits
Registration - last 12 months or next 30 days over	£79,000 from 1 April 2013
Deregistration - next 12 months under	£77,000 from 1 April 2013
Cash accounting scheme - up to	£1,350,000
Optional flat rate scheme - up to	£150,000
Annual accounting scheme - up to	£1,350,000

VAT on fuel for private use in cars

Where businesses wish to reclaim the input VAT on fuel which has some degree of private use, they must account for output VAT on a scale charge. The table shows the VAT chargeable for quarters commencing on or after 1 May 2013.

CO2 emissions (g/km)	Quarterly VAT
	Fuel scale charge £	VAT on charge £
Zero	168	28.00
Up to 75	168	28.00
76-94	168	28.00
95 - 99	168	28.00
100 - 104	168	28.00
105 - 109	168	28.00
110 - 114	168	28.00
115 - 119	168	28.00
120 - 124	168	28.00
125 - 129	253	42.17
130 - 134	269	44.83
135 - 139	286	47.67
140 - 144	303	50.50
145 - 149	320	53.33
150 - 154	337	56.17
155 - 159	354	59.00
160 - 164	371	61.83
165 - 169	388	64.67
170 - 174	404	67.33
175 - 179	421	70.17
180 - 184	438	73.00
185 - 189	455	75.83
190 - 194	472	78.67
195 - 199	489	81.50
200 - 204	506	84.33
205 - 209	523	87.17
210 - 214	539	89.83
215 - 219	556	92.67
220 - 224	573	95.50
225 and above	590	98.33

Chargeable on employees earning £8,500 or over (including benefits), and directors.

Inheritance Tax

All lifetime transfers not covered by exemptions and made within seven years of death will be added back into the estate for the purpose of calculating the tax payable. Tax attributable to such transfers is then subject to Taper Relief:

Years before death	0-3	3-4	4-5	5-6	6-7
Tax reduced by	0%	20%	40%	60%	80%

Main Reliefs
Business property:
- business or interest therein	100%
- qualifying shareholdings in unquoted* companies	100%
- land, buildings, machinery, or plant used by transferor's controlled company or partnership	50%
Agricultural property	50% or 100%
*Unquoted companies include those listed on AIM

Main Exemptions

1. Most transfers between spouses and civil partners.
2. The first £3,000 of lifetime transfers in any tax year plus any unused balance from previous year.
3. Gifts of up to but not exceeding £250 p.a. to any number of persons.
4. Gifts in consideration of marriage or civil partnership of: up to £5,000 by a parent, up to £2,500 by a grandparent or great grandparent, or up to £1,000 by any other person.
5. Gifts made out of income that form part of normal expenditure and do not reduce the standard of living.
6. Gifts to charities, whether made during lifetime or on death.

Vehicle Benefits

The taxable benefit is calculated as a percentage of the list price of the car, on the day before it was first registered, plus certain accessories. This percentage depends upon the rate at which the car emits carbon dioxide (CO₂), and the fuel type.

For cars which cannot produce CO₂ engine emissions under any circumstances when driven ('zero emission cars', including those powered solely by electricity), the appropriate percentage is reduced to 0%, thereby reducing the car benefit charge to nil.

For cars emitting between 1 and 75g/km the appropriate percentage is reduced to 5% (8% for diesel) for 5 years from 6 April 2010.

You can find the appropriate percentage for 2013/14 using the following table:

CO2 emissions (g/km)	Appropriate percentage
	Petrol %	Diesel %
Zero	0	0
Up to 75	5	8
76-94	10	13
95-99	11	14
100-104	12	15
105-109	13	16
110-114	14	17
115-119	15	18
120-124	16	19
125-129	17	20
130-134	18	21
135-139	19	22
140-144	20	23
145-149	21	24
150-154	22	25
155-159	23	26
160-164	24	27
165-169	25	28
170-174	26	29
175-179	27	30
180-184	28	31
185-189	29	32
190-194	30	33
195-199	31	34
200-204	32	35
205-209	33	35
210-214	34	35
215 and above	35	35

 

How to find out how much CO₂ your company car emits – see:

the car’s V5 registration document your dealer the data pages of car magazines (current models)

the Vehicle Certification Agency – www.vca.gov.uk the website of the Society of Motor Manufacturers and Traders - http://www.smmtco2.co.uk/co2search3.asp

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:

Engine capacity	Taxable %
Up to 1400cc	15%
1401 - 2000cc	22%
Over 2000cc	32%

 

Car Fuel Benefit

The taxable car fuel benefit, for 2013/14, is calculated by applying the CO₂ based car benefit percentage to the car fuel benefit charge multiplier of £21,100.

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.

Fuel-Only Mileage Rates
HMRC advisory mileage rates at the time of the Budget for employee private mileage reimbursement or employer reimbursement of business mileage in company cars are:
Engine Size	Petrol	LPG
1400cc or less	15p	10p
1401cc - 2000cc	18p	12p
Over 2000cc	26p	18p
Engine Size	Diesel
1600cc or less	13p
1601cc - 2000cc	15p
Over 2000cc	18p

 

Example: A company car driver has a car which, on the day before it was first registered, had a list price of £21,000. It runs on petrol, and emits 177 g/km of CO₂.

If we assume the driver pays tax at 40%, the 2013/14 tax bill on the car is: £21,000 x 27% x 40% = £2,268

If the employer provides any fuel used for private journeys and is not reimbursed for the cost, the 2013/14 tax bill for the fuel is: £21,100 x 27% x 40% = £2,279.

Company Vans

The taxable benefit for the unrestricted use of company vans is £3,000 plus a further £564 of taxable benefit if fuel is provided by the employer for private travel.

Van and fuel charge	Van	Fuel	Total
Tax (20% taxpayer)	£600	£112.80	£712.80
Tax (40% taxpayer)	£1,200	£225.60	£1,425.60
Tax (45% taxpayer)	£1,350	£253.80	£1,603.80
Employer's class 1A NICs	£414	£77.83	£491.83

Van drivers can avoid a benefit charge if they agree not to use the van for personal journeys. Driving to and from work is acceptable so long as there is a reasonable amount of business use.

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.

Mileage Allowances

It is quite normal practice for employees to be reimbursed at a reasonable mileage rate for business use of their own vehicles. The income tax and national insurance contributions (NICs) position is as follows:

A statutory system of Approved Mileage Allowance Payments (AMAPs) applies for employees using their own vehicles for business journeys, as follows:
Cars and vans: on the first 10,000 miles in the tax year on each additional mile above this	45p per mile 25p per mile
Motorcycles	24p per mile
Bicycles	20p per mile

It is no longer possible to make a claim for tax relief based on the actual receipted bills, nor claim capital allowances or interest on loans related to car purchases.

Unless the employee is reimbursed at a rate higher than the AMAP, the payments do not need to be reported on a P11D. If the employer pays less than these rates, it is possible for the employee to claim income tax relief for the shortfall.

Rates of up to 5p per mile, per passenger, are also tax- and NICs- free when paid for the carriage of fellow employees on the same business trip. This now also covers volunteers who drive for hospital car services etc, even though they are not strictly employees.

National Insurance Contributions

Class 1 (not contracted out)	Employer	Employee
Payable on weekly earnings of
Up to £107 (lower earnings limit)	Nil	Nil
£107 - £144 (employers' earnings threshold)	Nil	Nil
£144.01 - £146 (employees' earnings threshold)	13.8%	Nil
£146.01 - £770 (upper accrual point)	13.8%	12%
£770.01 - £817 (upper earnings limit)	13.8%	12%
Over £817	13.8%	2%
Over state retirement age, the employee contribution is generally Nil
Class 1A (on relevant benefits)	13.8%	Nil
Class 1B (on PAYE settlement arrangement)	13.8%	Nil
Class 2 (Self employed)	£2.65 per week
Limit of net earnings for exception	£5,595 per annum
Class 3 (Voluntary)	£13.25 per week
Class 4* (Self employed on profits)
£7,605 - £42,475	9%
Excess over £42,475	2%
*Exemption applies if state retirement age was reached by 6 April 2012.

 

Note

For those earning between £107 per week and £770 per week, employers receive a rebate of 3.4% on contracted out salary related schemes, and employees a rebate of 1.4%.

Key Dates and Deadlines

Payment Dates
Income Tax (including Class 4 NIC)
31 July 2013	2012/13 second payment on account
31 January 2014	2012/13 balancing payment, and 2013/14 first payment on account
31 July 2014	2013/14 second payment on account
31 January 2015	2013/14 balancing payment, and 2014/15 first payment on account
Class 1A NICs
19 July 2013	2012/13 payment due
Capital Gains Tax
31 January 2014	2012/13 Capital Gains Tax
31 January 2015	2013/14 Capital Gains Tax
Corporation Tax
9 months and one day after the end of the accounting period
Inheritance Tax
6 months after the end of the month of death.
For chargeable lifetime transfers between 6 April and 30 September, due date is 30 April in the following year.
For chargeable lifetime transfers between 1 October and 5 April, due date is six months after the end of the month in which the transfer was made.
Latest Filing/Issuing Deadlines - 2012/13 PAYE Returns
19 May 2013	P14, P35, P38 and P38A - file online.
31 May 2013	Issue P60s to employees.
6 July 2013	P9D, P11D and P11Db - also issue copies to employees Form 42 (reporting of employment-related securities)
2013 Self Assessment Tax Return (SATR)
31 October 2013	Last filing date - SATR Paper Version
30 December 2013	SATR Online if outstanding tax (less than £3,000) to be included in 2014-15 PAYE code
31 January 2014	Last filing date - SATR Online

 

Pension Premiums

There is no financial limit on the amount that may be contributed to a registered pension scheme. The maximum amount on which an individual can claim tax relief in any tax year is the greater of the individual's UK relevant earnings or £3,600.

If total pension input exceeds the annual allowance of £50,000 there may be a tax charge on the excess.

Maximum age for tax relief	74
Minimum age for taking benefits	55
Lifetime allowance charge - lump sum paid	55%
Lifetime allowance charge - monies retained	25%
on cumulative benefits exceeding	£1,500,000*
Maximum tax-free lump sum	25%*

 

*Subject to transitional protection for excess amount.

Note - For most pension arrangements, the total pension input is the aggregate of contributions paid into all the individual's pension savings during the relevant pension input period (PIP). Contributions should be the gross amount (i.e. including the tax relief attaching to the contributions). The PIP is usually the year to the anniversary date which falls within the relevant tax year. There are special rules for defined benefit arrangements.

 

Savings and Investments

Individual Savings Accounts (ISAs)

Overall investment limit                 £11,520
Including cash maximum of             £5,760

Notes

1. Investments in ISAs are free of income tax and capital gains tax.
2. Those aged 16-17 can invest in a cash ISA.
3. ISAs allow you to take your money out at any time without losing tax relief and furthermore you are not required to declare income and capital gains from ISA savings.
4. The annual investment limit for a Junior ISA is £3,720.

Stamp Taxes

The rate of stamp duty / stamp duty reserve tax on the transfer of shares and securities is generally payable at 0.5 per cent.

1. Individuals are able to claim higher rate relief on cash gifts and payments to charities under gift aid. Basic rate tax is treated as having been deducted, so you must pay enough tax for the year to cover the tax witheld from your Gift Aid payment.

1. Special tax reliefs apply to gifts to charities of certain types of shares and securities, or land and buildings.

2. Individuals have the opportunity to make a claim for charitable donations made in one tax year to be treated as if they had been made in the previous tax year. For example, a request could be made for Gift Aid payments made between 6 April 2013 and the date that the 2013 return is filed to be treated as if they were made in the year to 5 April 2013. This would mean that a payment could rank for higher rate tax relief for 2012/13, even if the donor is liable at basic rate only in 2013/14. The request would normally be made by completing the relevant box in the 2013 tax return, and the opportunity to carry back donations is lost once that return has been filed (provided this is no later than 31 October 2013 or 31 January 2014, as appropriate). It is not possible to amend the 2013 tax return in order to carry back a donation.