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Income tax rates 2012/13 and 2013/14


Income Tax rates and taxable bands Rate 2011-12 2012-13 2013-14 Starting rate for savings: 10%* £0 - £2,560 £0-£2,710 £0- £2,790 Basic rate: 20% £0 - £35,000 £0-£34,370 £0-£32,010 Higher rate: 40% £35,001 - £150,000 £34,371-£150,000 £32,011- £150,000 Additional rate: 50% Over £150,000 Over £150,000 N/A 45% from 6 April 2013 N/A N/A Over £150,000 * The 10 per cent starting rate applies to savings income only. If, after deducting your Personal Allowance from your total income liable to Income Tax, your non-savings income is above this limit then the 10 per cent starting rate for savings will not apply. Non-savings income includes income from employment, profits from self-employment, pensions, income from property and taxable benefits. The rates available for dividends are the 10 per cent ordinary rate, the 32.5 per cent dividend upper rate and the dividend additional rate of 42.5 per cent (the dividend additional rate is 37.5 per cent from 2013-14) .

Rates and Allowances 2011-12


Income Tax allowances table Income Tax allowances 2009-10 2010-11 2011-12 Personal Allowance (1) £6,475 £6,475 £7,475 Income limit for Personal Allowance Not applicable £100,000 £100,000 Personal Allowance for people aged 65-74 (1)(2) £9,490 £9,490 £9,940 Personal Allowance for people aged 75 and over (1)(2) £9,640 £9,640 £10,090 Married Couple's Allowance (born before 6th April 1935 but aged under 75) (2)(3)(4) Not applicable Not applicable Not applicable Married Couple's Allowance (born before 6th April 1935 and aged 75 and over) (2) (3) £6,965 £6,965 £7,295 Income limit for age-related allowances £22,900 £22,900 £24,000 Minimum amount of Married Couple's Allowance £2,670 £2,670 £2,800 Blind Person's Allowance £1,890 £1,890 £1,980 1.From the 2010-11 tax year the Personal Allowance reduces where the income is above £100, 000 - by £1 for every £2 of income above the £100,000 limit. This reduction applies irrespective of age. 2.These allowances reduce where the income is above the income limit for age-related allowances by £1 for every £2 of income above the limit. For the 2009-10 they will never be less than the basic Personal Allowance or minimum amount of Married Couple's Allowance. However, from the 2010-11 tax year the Personal Allowance for people aged 65 to 74 and 75 and over can be reduced below the basic Personal Allowance where the income is above £100,000. 3.Tax relief for the Married Couple's Allowance is given at the rate of 10 per cent. 4.In the 2009-10 tax year all Married Couple's Allowance claimants in this category became 75 at some point during the year and therefore entitled to the higher amount of the allowance - for those aged 75 and over.

PAYE Codings 2010/11


Multiple or incorrect Coding Notices: information for employers, pension providers and agents HMRC has recently introduced the new National Insurance and PAYE Service (NPS) which we are using to issue tax coding notices for the first time. The transition to the new system has brought to light some discrepancies in our existing records and this is resulting in a number of incorrect Coding Notices being issued. This page gives you the latest information. In our previous message, we explained that we had started work to review codes where data mismatches had been identified and that some P9s may be issued later than usual. P9s continue to be issued until the new tax year, from which point 2010-11 codes will be notified on a P6. Issue of P6s We expect to complete the review in mid April 2010 so you may receive more 2010-11 P6s than you would normally receive in the month. Unless you receive a revised code for an employee or pension recipient please continue to use the code rolled over from 2009-10. What should employees/pension recipients do? In some cases, your employees or pension recipients may not have a Notice of Coding (P2) that corresponds to the code you are using. This is because we focused on getting a correct code to you first, so some P9s were issued to employers before the P2s were sent to employees or pension recipients. P2s will continue to be sent to employees and pension recipients until the review is complete. You should continue to use the code shown on the P9. If an employee or pension recipient believes the code you are using to be incorrect, please ask them to contact us on the number shown on their Notice of Coding if they have one or on Tel: 0845 3000 627. Tax codes and PAYE Coding Notices - more information for employees and pension recipients

PAYE Late Payment Penalties


PAYE late payment penalties From 6 April 2010 new penalties will apply to all employers who do not pay PAYE, NICs, Construction Industry Scheme deductions and student loan deductions on time and in full. It replaces an existing penalty under the Mandatory Electronic Payment (MEP) scheme, which affected employers with 250 or more employees. Find out more about late payment penalties. HMRC will be publishing a new guide about the late payment penalties on 6 April.

Form P800 2010/11


PAYE Tax CalculationsFrom July HM Revenue & Customs (HMRC) will be sending out P800 Tax Calculations for the tax year 2010-11. At the end of each tax year, employers and pension providers send details of the salary, pension and tax paid for each individual to HMRC. We use this information to check that the correct amount of tax has been deducted. Most people have paid the right amount of tax through the Pay As You Earn (PAYE) system and there is nothing more for employers, employees or HMRC to do - so you do not need to be concerned if you do not get a P800 Tax Calculation. However, some people may pay too much or too little tax during the year. Typical examples are people whose circumstances change during the year (perhaps because they've got an additional source of employment or pension income), or who move in and out of work. We are dealing with people who are due a refund first. This means that people will get their money back more quickly. We will send P800 Tax Calculations later in the year to people who have paid too little tax. If you have paid too much tax we will automatically send you a cheque within 14 working days of the date on your P800 Tax Calculation. If you have paid too little tax, we will usually automatically collect any underpayment through your tax code in 12 monthly instalments over the next tax year, from April 2012. (As long as you have enough PAYE income from a continuing employment or UK based pension).




Budget 2013

Fairness This Budget includes measures to build a fairer society by making the tax and welfare system fairer, by supporting aspiration and by keeping costs down for households and business, including: •meeting the commitment to make the first £10,000 of people’s income free from income tax a year ahead of schedule – the personal allowance will be increased by £560 to £10,000 in 2014 to 2015; by April 2014, 2.7 million individuals low-income people under 65 will have been lifted out of income tax altogether •cancelling the fuel duty increase that was planned for 1 September 2013 to support motorists and businesses – fuel duty will have been frozen for nearly 3 and a half years, with pump prices 13p per litre lower from April 2013 than under previously announced plans


•introducing a tax-free childcare scheme so that working families can pay for childcare effectively tax-free Tax-free Childcare: Infographic


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