Tax Rates Centre 2014
Contents
- Introduction
- Income Tax
- Capital Gains Tax
- Corporation Tax
- Capital Allowances
- Value Added Tax
- Inheritence Tax
- Vehicle Benefits
- Mileage Allowances
- National Insurance Contributions
- Key Dates and Deadlines
- Pension Premiums
- Charitable Giving
- Savings and Investments
- Some Useful Rates
- Stamp Taxes
Introduction
Our Tax Rates Centre provides a summary of some of the essential tax rates, dates and figures for 2014/15.
2014/15 Tax Rates Centre is for guidance only and professional advice should be obtained before acting on any information contained as no responsibility can be accepted for loss occasioned as a result of action taken or refrained from in consequence of its contents.
Income Tax
| Income tax rates | Note | 2014/15 | 2013/14 |
|---|---|---|---|
| Basic rate band – income up to | £31,865 | £32,010 | |
| Starting rate for savings | *10% | *10% | |
| Basic rate | 20% | 20% | |
| Dividend ordinary rate | 10% | 10% | |
| Higher rate – income over | £31,865 | £32,010 | |
| Higher rate | 40% | 40% | |
| Dividend upper rate | 32.5% | 32.5% | |
| Additional rate – income over | £150,000 | £150,000 | |
| Additional rate | 45% | 45% | |
| Dividend additional rate | 37.5% | 37.5% | |
| * Starting rate is for savings income up to the starting rate limit of £2,880 (£2,790) within the basic rate band. The rate applies to any balance of the limit remaining after allocating taxable non-savings income. | |||
| Trusts | |||
| For interest in possession trusts on all income, and other trusts on the first £1,000 of income (“standard rate band”): | |||
| dividend ordinary rate | 4 | 10% | 10% |
| savings income | 4 | 20% | 20% |
| other income | 4 | 20% | 20% |
| Income of other trusts above £1,000 is taxed at the special trust rates: | |||
| rate applicable to trusts | 45% | 45% | |
| dividend trust rate | 37.5% | 37.5% | |
| Personal allowance (PA) | |||
| Born after 5 April 1948 | 3 | £10,000 | £9,440 |
| Born after 5 April 1938 and before 6 April 1948 | 1,3 | £10,500 | £10,500 |
| Born before 6 April 1938 | 1,3 | £10,660 | £10,660 |
| Blind person’s allowance | £2,230 | £2,160 | |
| Married couple’s allowance (MCA) | |||
| Either partner born before 6 April 1935 (relief restricted to 10%) | 2,3 | £8,165 | £7,915 |
| Tax Shelters | |||
| Venture Capital Trust (VCT) up to | £200,000 | £200,000 | |
| Enterprise Investment Scheme (EIS) up to | £1,000,000 | £1,000,000 | |
| Seed Enterprise Investment Scheme up to | £100,000 | £100,000 | |
| 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 (registered) | 20% | 20% | |
| Higher (not registered) | 30% | 30% | |
Notes
- The higher rates of personal allowances are reduced by £1 for each £2 of excess income over £27,000 (£26,100) until the basic allowance is reached.
- Similar limits apply to the married couple’s allowance. The reduction in allowance is subject to a minimum level of £3,040. (For couples married before 5 December 2005, only the husband’s income is taken into account. For those married on or after 5 December 2005 or in a civil partnership, only the higher earner’s income is taken into account).
- The personal allowance, including the minimum age-related allowance, is reduced by £1 for every £2 that adjusted net income exceeds £100,000 regardless of the individual’s date of birth.
- Where there are several trusts created by the same settlor, the “standard rate band” is divided equally between them, subject to a minimum band of £200 for each trust.
Capital Gains Tax
| Capital gains tax rates and bands for 2014/15 | |
|---|---|
| On chargeable gains | |
| Total taxable income and gains:up to £31,865from £31,866 | 18%28% |
| Annual exemption | |
| – individual | £11,000 |
| – most trustees | £5,500 |
| Chattels exemption | |
| (proceeds per item or set) | £6,000 |
Entrepreneurs’ Relief
Qualifying gains will be taxed at 10%.
Claims may be made on more than one occasion up to a “lifetime” total of £10 million.
Notes
- Transfers between husband and wife or civil partners living together are generally exempt.
- Capital gains of all trusts for 2014/15 are taxed at the rate of 28%. Where there are several trusts created by the same settlor, the annual exemption is divided equally between them, subject to a minimum exemption of £1,090 for each trust.
Corporation Tax
Corporation tax rates and bands are as follows:
| Financial Year to | 31 March 2015 | 31 March 2014 |
|---|---|---|
| Taxable profits | ||
| First £300,000 | 20% | 20% |
| Next £1,200,000 | 21.25% | 23.75% |
| Over £1,500,000 | 21% | 23% |
Capital Allowances
Plant and Machinery:
| Investment for use in Enterprise Zones, energy saving and environmentally beneficial equipment, new zero-emission goods vehicles, low CO2 emission (up to 95g/km) cars, natural gas/hydrogen refuelling equipment: First year allowance. | 100% |
| Annual investment allowance (AIA)- on the first £500,000 of investment(excludes cars and other expenditure already qualifying for 100% FYA) | 100%* |
| Writing down allowance on expenditure not qualifying for AIA or FYA: | |
| Long-life assets, integral features of buildings, cars over 130g/km | 8% |
| Other plant and machinery | 18% |
| Business premises renovation: max initial allowance | 100% |
* Transitional rules may apply
Value Added Tax
| From | 1 April 2014 |
|---|---|
| Standard rate | 20% |
| VAT fraction | 1/6 |
| Reduced rate | 5% |
| Taxable Turnover Limits | |
| Registration – last 12 months or next 30 days over | £81,000 from 1 April 2014 |
| Deregistration – next 12 months under | £79,000 from 1 April 2014 |
| Cash accounting scheme – up to | £1,350,000 |
| Optional flat rate scheme – up to | £150,000 |
| Annual accounting scheme – up to | £1,350,000 |
VAT on fuel for private use in cars
Where businesses wish to reclaim the input VAT on fuel which has some degree of private use, they must account for output VAT for which they may use the flat rate valuation.
The table shows the VAT chargeable for quarters commencing on or after 1 May 2014.
| CO2 emissions(g/km) | Quarterly VAT | |
|---|---|---|
| Flat Rate Charge £ | VAT on Charge £ | |
| Up to 124 | 156.00 | 26.00 |
| 125-129 | 234.00 | 39.00 |
| 130-134 | 251.00 | 41.83 |
| 135-139 | 266.00 | 44.33 |
| 140-144 | 282.00 | 47.00 |
| 145-149 | 297.00 | 49.50 |
| 150-154 | 313.00 | 52.17 |
| 155-159 | 328.00 | 54.67 |
| 160-164 | 345.00 | 57.50 |
| 165-169 | 360.00 | 60.00 |
| 170-174 | 376.00 | 62.67 |
| 175-179 | 391.00 | 65.17 |
| 180-184 | 408.00 | 68.00 |
| 185-189 | 423.00 | 70.50 |
| 190-194 | 439.00 | 73.17 |
| 195-199 | 454.00 | 75.67 |
| 200-204 | 470.00 | 78.33 |
| 205-209 | 485.00 | 80.83 |
| 210-214 | 502.00 | 83.67 |
| 215-219 | 517.00 | 86.17 |
| 220-224 | 533.00 | 88.83 |
| 225 or more | 548.00 | 91.33 |
Inheritance Tax
| 2014/15 | 2013/14 | |
|---|---|---|
| Standard threshold | £325,000 | £325,000 |
| Combined threshold maximum for married couples and civil partners | £650,000 | £650,000 |
| Rate of tax on balance: | ||
| Chargeable lifetime transfersTransfers on, or within 7 years of, death | 20%*40% | 20%*40% |
| * A lower rate of 36% applies where 10% or more of a deceased person’s net estate is left to charity | ||
All lifetime transfers not covered by exemptions and made within seven years of death will be added back into the estate for the purpose of calculating the tax payable. Tax attributable to such transfers is then subject to Taper Relief:
| Years before death | 0-3 | 3-4 | 4-5 | 5-6 | 6-7 |
|---|---|---|---|---|---|
| Tax reduced by | 0% | 20% | 40% | 60% | 80% |
| Main Reliefs | |
|---|---|
| Business property: | |
| – business or interest therein | 100% |
| – qualifying shareholdings in unquoted* companies | 100% |
| – land, buildings, machinery, or plant used by transferor’s controlled company or partnership | 50% |
| Agricultural property | 50% or 100% |
| *Unquoted companies include those listed on AIM | |
Main Exemptions
- Most transfers between spouses and civil partners.
- The first £3,000 of lifetime transfers in any tax year plus any unused balance from previous year.
- Gifts of up to but not exceeding £250 p.a. to any number of persons.
- Gifts in consideration of marriage or civil partnership of: up to £5,000 by a parent, up to £2,500 by a grandparent or great grandparent, or up to £1,000 by any other person.
- Gifts made out of income that form part of normal expenditure and do not reduce the standard of living.
- Gifts to charities, whether made during lifetime or on death.
Vehicle Benefits
Chargeable on employees earning £8,500 or over (including benefits), and directors.
Car Benefit
The taxable benefit is calculated as a percentage of the list price of the car, on the day before it was first registered, plus certain accessories. This percentage depends upon the rate at which the car emits carbon dioxide (CO2), and the fuel type.
For cars which cannot produce CO2 engine emissions under any circumstances when driven (‘zero emission cars’, including those powered solely by electricity), the appropriate percentage is reduced to 0%, thereby reducing the car benefit charge to nil.
For cars emitting between 1 and 75g/km the appropriate percentage is reduced to 5% (8% for diesel) for 5 years from 6 April 2010.
You can find the appropriate percentage for 2014/15 using the following table:
| CO2 emissions(g/km) | Appropriate percentage | |
|---|---|---|
| Petrol % | Diesel % | |
| Zero | 0 | 0 |
| Up to 75 | 5 | 8 |
| 76-94 | 11 | 14 |
| 95-99 | 12 | 15 |
| 100-104 | 13 | 16 |
| 105-109 | 14 | 17 |
| 110-114 | 15 | 18 |
| 115-119 | 16 | 19 |
| 120-124 | 17 | 20 |
| 125-129 | 18 | 21 |
| 130-134 | 19 | 22 |
| 135-139 | 20 | 23 |
| 140-144 | 21 | 24 |
| 145-149 | 22 | 25 |
| 150-154 | 23 | 26 |
| 155-159 | 24 | 27 |
| 160-164 | 25 | 28 |
| 165-169 | 26 | 29 |
| 170-174 | 27 | 30 |
| 175-179 | 28 | 31 |
| 180-184 | 29 | 32 |
| 185-189 | 30 | 33 |
| 190-194 | 31 | 34 |
| 195-199 | 32 | 35 |
| 200-204 | 33 | |
| 205-209 | 34 | |
| 210 or more | 35 | |
How to find out how much CO2 your company car emits – see:
|
|
Reliable emissions data is not widely available for cars registered before 1 January 1998. For them, the following taxable percentages apply, regardless of fuel type:
| Engine capacity | Taxable % |
|---|---|
| Up to 1400cc | 15% |
| 1401 – 2000cc | 22% |
| Over 2000cc | 32% |
Car fuel benefit
The taxable car fuel benefit, for 2014/15, is calculated by applying the CO2 based car benefit percentage to the car fuel benefit charge multiplier of £21,700.
If the employee pays for the full cost of all fuel for private journeys (usually including home to work) there will be no car fuel benefit. In all other cases the full tax charge will be due.
| Fuel-Only Mileage Rates | ||
|---|---|---|
| HMRC advisory mileage rates at the time of the Budget for employee private mileage reimbursement or employer reimbursement of business mileage in company cars are: | ||
| Engine Size | Petrol | LPG |
| 1400cc or les4 | 15p | 9p |
| 1401cc – 2000cc | 16p | 11p |
| Over 2000cc | 24p | 17p |
| Engine Size | Diesel | |
| 1600cc or less | 12p | |
| 1601cc – 2000cc | 14p | |
| Over 2000cc | 17p | |
Example: A company car driver has a car which, on the day before it was first registered, had a list price of £21,000. It runs on petrol, and emits 177 g/km of CO2.
If we assume the driver pays tax at 40%, the 2014/15 tax bill on the car is: £21,000 x 28% x 40% = £2,352
If the employer provides any fuel used for private journeys and is not reimbursed for the cost, the 2014/15 tax bill for the fuel is: £21,700 x 28% x 40% = £2,430.40.
Company vans
The taxable benefit for the unrestricted use of company vans is £3,090 plus a further £581 of taxable benefit if fuel is provided by the employer for private travel.
| Van and fuel charge | Van | Fuel | Total |
|---|---|---|---|
| Tax (20% taxpayer) | £618 | £116.20 | £734.20 |
| Tax (40% taxpayer) | £1,236 | £232.40 | £1,468.40 |
| Tax (45% taxpayer) | £1,390.50 | £261.45 | £1,651.95 |
| Employer’s class 1A NICs | £426.42 | £80.18 | £506.60 |
Van drivers can avoid a benefit charge if they agree not to use the van for personal journeys. Driving to and from work is acceptable so long as there is a reasonable amount of business use.
The flat rate of £3,090 is reduced to nil for vans which cannot produce C02 engine emissions under any circumstances when driven. There is no fuel benefit for such vans.
Mileage Allowances
It is quite normal practice for employees to be reimbursed at a reasonable mileage rate for business use of their own vehicles. The income tax and national insurance contributions (NICs) position is as follows:
| A statutory system of Approved Mileage Allowance Payments (AMAPs) applies for employees using their own vehicles for business journeys, as follows: | |
|---|---|
| Cars and vans:on the first 10,000 miles in the tax yearon each additional mile above this | 45p per mile25p per mile |
| Motorcycles | 24p per mile |
| Bicycles | 20p per mile |
It is no longer possible to make a claim for tax relief based on the actual receipted bills, nor claim capital allowances or interest on loans related to car purchases.
Unless the employee is reimbursed at a rate higher than the AMAP, the payments do not need to be reported on a P11D. If the employer pays less than these rates, it is possible for the employee to claim income tax relief for the shortfall.
Rates of up to 5p per mile, per passenger, are also tax- and NICs- free when paid for the carriage of fellow employees on the same business trip. This now also covers volunteers who drive for hospital car services etc, even though they are not strictly employees.
National Insurance Contributions
| Class 1 (not contracted out) | Employee (primary) |
|---|---|
| Payable on weekly earnings of | |
| Below £111 (lower earnings limit) | 0% |
| £111 – £153 (primary threshold) | 0%* |
| £153.01 – £805 (upper earnings limit) | 12%** |
| Above £805 | 2%** |
| * No NICs are actually payable but notional Class 1 NIC is deemed to have been paid; this protects certain state benefit entitlements.** Over state pension age, the employee contribution is generally nil | |
| Employer (secondary) | |
| Up to £153 (secondary threshold) | Nil |
| Above £153 | 13.8% |
| Employment Allowance | Up to £2,000 (per year) |
| Class 1A (on relevant benefits) | 13.8% |
| Class 1B (on PAYE settlement arrangement) | 13.8% |
| Class 2 (Self employed) | £2.75 per week |
| Limit of net earnings for exception | £5,885 per annum |
| Class 3 (Voluntary) | £13.90 per week |
| Class 4* (Self employed on profits) | |
| £7,956 – £41,865 | 9% |
| Excess over £41,865 | 2% |
| *Exemption applies if state pension age was reached by 6 April 2014. | |
Note
For those earning between £111 per week and £770 per week, employers receive a rebate of 3.4% on contracted out salary related schemes, and employees a rebate of 1.4%.
Key Dates and Deadlines
| Payment Dates | |
|---|---|
| Income Tax (including Class 4 NIC) | |
| 31 July 2014 | 2013/14 second payment on account |
| 31 January 2015 | 2013/14 balancing payment, and2014/15 first payment on account |
| 31 July 2015 | 2014/15 second payment on account |
| 31 January 2016 | 2014/15 balancing payment, and2015/16 first payment on account |
| Class 1A NICs | |
| 19 July 2014 | 2013/14 payment due |
| Capital Gains Tax | |
| 31 January 2015 | 2013/14 Capital Gains Tax |
| 31 January 2016 | 2014/15 Capital Gains Tax |
| Corporation Tax | |
| 9 months and one day after the end of the accounting period | |
| Inheritance Tax | |
| 6 months after the end of the month of death. | |
| For chargeable lifetime transfers, due date is six months after the end of the month in which the transfer was made. | |
| Latest Filing/Issuing Deadlines – 2013/14 PAYE Returns | |
| 31 May 2014 | Issue P60s to employees. |
| 6 July 2014 | P9D, P11D and P11Db – also issue copies to employeesForm 42 (reporting of employment-related securities) |
| 2014 Self Assessment Tax Return (SATR) | |
| 31 October 2014 | Last filing date – SATR Paper Version |
| 30 December 2014 | SATR Online if outstanding tax (less than £3,000) to be included in 2015-16 PAYE code |
| 31 January 2015 | Last filing date – SATR Online |
Pension Premiums
There is no financial limit on the amount that may be contributed to a registered pension scheme. The maximum amount on which an individual can claim tax relief in any tax year is the greater of the individual’s UK relevant earnings or £3,600 (gross).
If total pension input exceeds the annual allowance of £40,000 there may be a tax charge on the excess.
| Maximum age for tax relief | 74 |
| Minimum age for taking benefits | 55 |
| Lifetime allowance charge – lump sum paid | 55% |
| Lifetime allowance charge – monies retained | 25% |
| on cumulative benefits exceeding | £1,250,000* |
| Maximum tax-free lump sum | 25%* |
*Subject to transitional protection for excess amount.
Note – For most pension arrangements, the total pension input is the aggregate of contributions paid into all the individual’s pension savings during the relevant pension input period (PIP). Contributions should be the gross amount (i.e. including the tax relief attaching to the contributions). The PIP is usually the year to the anniversary date which falls within the relevant tax year. There are special rules for defined benefit arrangements.
Charitable Giving
Gift Aid
- Individuals are able to claim higher rate relief on cash gifts and payments to charities under gift aid. Basic rate tax is treated as having been deducted, so you must pay enough tax for the year to cover the tax witheld from your Gift Aid payment.
- Special tax reliefs apply to gifts to charities of certain types of shares and securities, or land and buildings.
- Individuals have the opportunity to make a claim for charitable donations made in one tax year to be treated as if they had been made in the previous tax year. For example, a request could be made for Gift Aid payments made between 6 April 2014 and the date that the 2014 return is filed to be treated as if they were made in the year to 5 April 2014. This would mean that a payment could rank for higher rate tax relief for 2013/14, even if the donor is liable at basic rate only in 2014/15. The request would normally be made by completing the relevant box in the 2014 tax return, and the opportunity to carry back donations is lost once that return has been filed (provided this is no later than 31 October 2014 or 31 January 2015, as appropriate). It is not possible to amend the 2014 tax return in order to carry back a donation.
Give As You Earn
- Employees may authorise participating employers to deduct donations from their gross salary for forwarding to their nominated charities.
- Employees receive tax relief in full on their donations.
Savings and Investments
ISAs
Individual Savings Accounts (ISAs) | ||
|---|---|---|
| ISAs 2014/15 | To 30 June 2014 | From 1 July 2014 |
| Overall Investment limit | £11,880* | £15,000 |
| Junior ISA limit | £3,840 | £4,000 |
*Including cash maximum of £5,940
Notes
- Investments in ISAs are free of income tax and capital gains tax.
- Those aged 16-17 can invest in a cash ISA, in addition to a Junior ISA.
- ISAs allow you to take your money out at any time without losing tax relief and furthermore you are not required to declare income and capital gains from ISA savings.
- Transitional rules may apply.
Some Useful Rates
| Weekly Benefit | |||
|---|---|---|---|
| 2014/15 | 2013/14 | ||
| Basic Retirement Pension | |||
| Single person | £113.10 | £110.15 | |
| Couple | £180.90 | £176.15 | |
| Child Benefit | |||
| First eligible child | £20.50 | £20.30 | |
| Each subsequent child | £13.55 | £13.40 | |
| Statutory Sick Pay (SSP) | |||
| Average weekly earnings £111 or over (2013/14 £109) | £87.55 | £86.70 | |
| Statutory Maternity Pay (SMP) | |||
| 90% of average weekly pay | First 6 weeks | First 6 weeks | |
| Lower of £138.18 (2013/14 £136.78) or 90% average weekly earnings | |||
| Minimum rate | £99.90 | £98.10 | |
| Statutory Adoption Pay (SAP) | 39 weeks | 39 weeks | |
| Statutory Paternity Pay (SPP)* | 2 weeks | 2 weeks | |
| Both SAP and SPP | |||
| Lower of £138.18 (2013/14 £136.78) or 90% average weekly earnings | |||
| Minimum rate | £99.90 | £98.10 | |
| *Additional statutory paternity pay (ASPP) may be available in certain circumstances. | |||
| Jobseeker’s Allowance | |||
| Single person (25 or over) | £72.40 | £71.70 | |
| Couple (both 18 or over) | £113.70 | £112.55 | |
| National Minimum Wage** | From 1 October 2014 | From 1 October 2013 | |
| 21 and over | £6.50 | £6.31 p.h. | |
| 18 – 20 | £5.13 | £5.03 p.h. | |
| 16 and 17 | £3.79 | £3.72 p.h. | |
| Apprentices** | £2.73 | £2.68 p.h. | |
| **Rate applies to apprentices under 19, or those 19 and over in the first year of apprenticeship. | |||
| Universal Credt (monthly rates) | |||
| Single person (25 or over) | £314.67 | £311.55 | |
| Couple (where one or both 25 or over) | £493.95 | £489.06 | |
Stamp Taxes
The rate of stamp duty / stamp duty reserve tax on the transfer of shares and securities is generally payable at 0.5%.
Stamp Duty Land Tax (SDLT)
| Transfers of property are subject to SDLT at the following rates: | |
|---|---|
| Value up to £125,000 (£150,000 for non-residential property) | Nil |
| Over £125,000 (£150,000) to £250,000 | 1% |
| Over £250,000 to £500,000 | 3% |
| Over £500,000 – £1,000,000 * | 4% |
| Over £1,000,000 * – £2,000,000 * | 5%* |
| Over £2,000,000* | 7%* |
| * Residential property only. A 15% rate will apply to properties over £500,000 purchased by certain “non-natural persons”. | |
New Leases
SDLT is charged according to the net present value of all the rental payments over the term of the lease (NPV), with a single rate of 1% on residential NPV’s over £125,000 and on non-residential NPV’s over £150,000.
VAT is excluded from treatment as consideration provided the landlord has not opted to charge VAT by the time the lease is granted.
Lease premiums
SDLT on premiums is the same as for transfers of land (except that the zero rate does not apply where the annual rent of a non-residential property is £1,000 or more.)
