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Tax Rates & Allowances


What does that mean?

Tax rates and allowances are the figures used to calculate tax liabilities and are reviewed annually in the budget.

The main Current Rates for 2006/2007 are:

   Allowances

   
Personal Allowance
   
£5,035 (may increase if over 65)

   Married Couples Allowance (over 65)*
   £6,065 (relief at 10%)


   Married Couples Allowance (over 75)**
   £6,135 (relief at 10%)

   Blind Persons Allowance
   £1,660 (relief at 10%)


   * Elder spouse aged under 75 and either spouse born before 6th April 1935.

   ** Either spouse aged 75 and over.

   (Both Married Couples Allowances are reduced by £1 for every £2 of income above £19,500)

   Tax Rates


   Lower Tax Rate
   
on income from £2,150  (10%)

   Basic Tax Rate
  
 on income from £2,151– £33,300

    (22%, – 20% on savings
    and capital gains)

   Higher Tax Rate
   
on income from £33,301
   and upwards  (40%)
 

   Miscellaneous


   
National Insurance
   Class 2 Exception
£4,465

   National Insurance
   Class 4 Band £5,035 to £33,540 at 8%
   Over £33,540 at 1%
   

   Capital Gains Tax Exemption £8,800


 
   
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