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Income tax

Tax bands and rates		2012/13	2011/12
Basic rate band		£34,370	£35,000
Basic tax rate		20%	20%
Dividend ordinary tax rate		10%	10%
Savings rate band		£2,710	£2,560
Savings rate		10%	10%
Higher rate band		£34,371 - £150,000	£35,001 - £150,000
Higher tax rate		40%	40%
Dividend higher tax rate		32.5%	32.5%
Additional rate band		Over £150,000	Over £150,000
Additional tax rate		50%	50%
Dividend additional tax rate		42.5%	42.5%
Allowances that reduce taxable income
Personal allowances	under 65	£8,105	£7,475
	65 to 74	£10,500	£9,940
	75 and over	£10,660	£10,090
Blind person's allowance		£2,100	£1,980
Age related allowances are reduced by £1 for each £2 of income above £25,400 (2011/12 £24,000), until the minimum of £8,105 (2011/12 £7,475) is reached. The minimum personal allowance is reduced, by £1 for each £2 of income from £100,000 (2011/12 - £100,000) to £116,210 (2011/12 - £114,950).
Allowances that reduce tax
Married couple's allowance (MCA)	78 and over (77 and over in 2011/12)	£7,705	£7,295
Tax reduction at 10%		£770.50	£729.50
The age for MCA is of the elder spouse or civil partner. The loss of tax reduction is 10p for each £2 of income above £25,400 (2011/12 £24,000) until the minimum of £296 (2011/12 £280) is reached. All ages as at 5 April 2013 (5 April for 2011/12).
Non domicile charge
Charge for adult non UK domiciliary - applies after UK residence in seven or more of the previous tax years		£50,000	£30,000
Tax shelters
Enterprise Investment Scheme (EIS) up to		£1,000,000	£500,000
Maximum amount for EIS carry back		£50,000	£50,000
Income tax relief		30%	30%
Venture Capital Trust (VCT) up to		£200,000	£200,000
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 rate - registered		20%	20%
Higher rate - not registered		30%	30%

Did you know?

That the Treasury is expecting to raise £154.8 billion from income tax (2011/12 - £152.6 billion).

2013 and beyond

From 2013/14 the age related allowance will be restricted. The allowance of £10,500 for 2012/13 will be restricted to those born after 5 April 1938 but before 6 April 1948. Similarly the £10,660 allowance for 2012/13 will be restricted to those born before 6 April 1938.

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