Income tax rates and bands are as follows:

Income Tax Allowances Table

Income tax rates and bands				2009-10	2010-11
Basic rate band				£37,400	£37,400
Basic rate tax				20%	20%
Dividend ordinary tax rate				10%	10%
Savings rate band				£2,440	£2,440
Savings rate				10%	10%
Higher rate band				Over £37,400	£37,400 - £150,000
Higher rate tax				40%	40%
Dividend higher tax rate				32.5%	32.5%
Additional rate band				N/A	Over £150,000
Additional tax rate				N/A	50%
Dividend additional tax rate				N/A	42.5%
Allowances that reduce taxable income
Personal allowance for people aged under 65 (4)				£6,475	£6,475
Personal allowance for people aged 65-74 (1) (3)				£9,490	£9,490
Personal allowance for people aged 75 and over (1) (3)				£9,640	£9,640
Blind person’s allowance				£1,890	£1,890
Income limit for age-related allowances				£22,900	£22,900
Allowances that reduce tax
Married couples allowance (MCA) (1)				£6,965	£6,965

 

(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.

(3) - Ages are as at the end of the tax year. Ages for the Married Couple’s Allowance relate to the elder spouse or civil partner

(4) - The minimum personal allowance is reduced by £1 for each £2 of income between £100,000 and £112,950.

Other Important Annual Limits and Rates

				2009-10	2010-11
Golden Handshake max.				£30,000	£30,000
Rent a Room - exempt on gross annual rent up to				£4,250	£4,250
Enterprise Investment Scheme investment		* Income tax relief available at 20%		£500,000	£500,000
Venture Capital Trust investment		* Income tax relief available at 30%		£200,000	£200,000
Construction Industry Scheme - Deduction Rate
Standard rate - registered				20%	20%
Higher rate - not registered				30%	30%