Tax Information Income Tax
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Tax Rates
| Note | 2003/04 | 2002/03 | ||
|---|---|---|---|---|
| Starting rate band - to | £1,960 | £1,920 | ||
| Tax Rate | 10% | 10% | ||
| Basic rate band - next | £28,540 | £27,980 | ||
| Normal Rate | 22% | 22% | ||
| Savings income rate | 20% | 20% | ||
| UK dividend income rate | 10% | 10% | ||
| Higher rate - taxable income over | £30,500 | £29,900 | ||
| Normal Rate | 40% | 40% | ||
| UK dividend income rate | 32.5% | 32.5% | ||
| Allowances that reduce taxable income | ||||
| Personal allowance | under 65 | 1 | £4,615 | £4,615 |
| 65 to 74 | 1, 3 | £6,610 | £6,100 | |
| 75 and over | 1, 3 | £6,720 | £6,370 | |
| Blind person’s allowance | £1,510 | £1,480 | ||
| Allowances that reduce tax | ||||
| Married couples’ allowance | ||||
| Tax reduction | 69 to 74 | 1, 2, 3 | £556.50 | £546.50 |
| 75 and over | 1, 2, 3 | £563.50 | £553.50 | |
| Venture Capital Trusts max. | 4 | £100,000 | £100,000 | |
| Enterprise Investment Scheme max. | 4 | £150,000 | £150,000 | |
| Golden Handshake max. | £30,000 | £30,000 | ||
| Rent a Room - exempt on gross annual rent up to | £4,250 | £4,250 | ||
Notes
- 1. Ages are as the end of the tax year. Ages for the married couples allowance relate to the elder of husband or wife.
- 2. The married couple's allowance is available only to those couples where at least one spouse was born before 6 April 1935.
- 3. The higher rates of personal allowances are reduced by £1 for each £2 of excess income over £18,300 (2002/03 £17,900) until the basic allowance is reached. Similar limits apply to the married couple's allowance: the loss of tax reduction is 10p for each £2 of excess income (only the husband's income is taken into account) until the minimum of £215 (2002/03 £211) is reached.
- 4. Subscription for new ordinary shares - 20% income tax relief. Also such investments by subscription are eligible for deferral of capital gains tax on gains re-invested (up to £100,000 of gains for VCTs, unlimited for EIS).
Did you know?
That Income Tax raised over £113 billion in 2002/03 (against a forecast in excess of £115 billion) and that in the current year receipts are expected to exceed £122 billion - an increase of almost 8%.