| Income tax rates | 2010/11 | |
| Starting rate 10%* | £0-£2,440 | |
| Basic rate 20% (dividends 10%) | £0-£37,400 | |
| Higher rate 40% (dividends 32.5%) | £37,401-£150,000 | |
| Additional rate 50% (dividends 42.5%) | over £150,000 | |
| * There is a starting rate for savings only. If an individual's non-savings taxable income exceeds the starting rate limit, the 10% starting rate will not be available for savings income. | ||
| Income tax allowances | 2010/11 | ||
| Personal allowance (age under 65) | £6,475 | ||
| Personal allowance (age 65-74) | £9,490 | ||
| Personal allowance reduced by 50% of income over | £100,000 | ||
| Personal allowance (age 75 and over) | £9,640 | ||
| Married/civil partners' allowance (75 and over)* | £6,965 | ||
| Married/civil partners' allowance (minimum amount)* | £2,670 | ||
| Age-related relief reduced by 50% of income over | £22,900 | ||
| Blind person's allowance | £1,890 | ||
| * Tax relief for the married/civil partners' allowance is given at the rate of 10%, and is only available where at least one spouse/partner was born before 6 April 1935. | |||
Rates and allowances
Income tax rates and allowances will not change for the tax year 2010/11 with the personal allowance remaining at £6,475. Other income tax allowances and the income tax bands will also be frozen.
Offshore tax evasion
There will be a new notification requirement for offshore accounts in certain jurisdictions and it will be backed up by a separate penalty regime. The combined penalties for evading tax by using offshore accounts will be up to 200% of unpaid tax.
Clean energy cash-back
The Chancellor confirmed that households that use renewable technology to generate electricity mainly for their own use will not be subject to income tax on feed-in tariffs.
Salary sacrifice: tax exemption for workplace canteens
The Finance Bill 2010 will include legislation to prevent employees using salary sacrifice or flexible benefit arrangements to meet the cost of free or subsidised meals provided by their employers. The legislation will take effect from 6 April 2011.
Saver: Remember, if you were born before 6 April 1960, you could invest up to £10,200 this tax year in an ISA. That includes up to £5,100 in a cash ISA. If you are younger, your ISA limit this year is £7,200 and will increase to £10,200 after 5 April 2010.
© 9 December 2009. This summary is for general information only and is not intended to be advice to any specific person. You are recommended to seek competent professional advice before taking or refraining from taking action on the basis of the contents of this summary. The summary represents our understanding of the law and HM Revenue and Customs practice as at 9 December 2009, which are subject to change. These proposals may be changed in the Spring 2010 Budget and subsequent legislation, or at any time.
Last Updated
