Note: It must be remembered that these proposals are subject to amendment during the
passage of the Finance Bill.

PERSONAL TAXATION	2006/07	2005/06
Personal allowance
general	£5,035	£4,895
aged 65 or over in year of assessment	£7,280	£7,090
aged 75 or over in year of assessment	£7,420	£7,220
age allowance income limit	£20,100	£19,500
minimum where income exceeds limit	£5,035	£4,895
Married couple’s allowance
(10% relief)
either partner born before 6 April 1935	£6,065	£5,905
either partner aged 75 or over in year of assessment	£6,135	£5,975
age allowance income limit	£20,100	£19,500
minimum where income exceeds limit	£2,350	£2,280
Blind person’s allowance	£1,660	£1,610
Income tax rates
Starting rate	10%	10%
on taxable income up to	£2,150	£2,090
Basic rate	22%	22%
on taxable income from starting rate limit up to	£33,300	£32,400
Higher rate	40%	40%
on taxable income over	£33,300	£32,400
Lower rate on certain interest income	20%	20%
Lower rate on dividend income	10%	10%
Higher rate on dividend income	32.5%	32.5%
COMPANY TAXATION	FY2006	FY2005
Corporation tax rates
All companies (except below)	30%	30%
Companies with small profits	19%	19%
— 19% rate limit	£300,000	£300,000
— marginal relief limit	£1,500,000	£1,500,000
— marginal relief fraction	11/400	11/400
— marginal rate	32.75%	32.75%
Starting rate	N/A	0%
— 0% rate limit	N/A	£10,000
— marginal relief limit	N/A	£50,000
— marginal relief fraction	N/A	19/400
— marginal rate	N/A	23.75%
Non-corporate distribution rate	N/A	19%
CAPITAL GAINS TAX	2006/07	2005/06
Rate — general	10%*:20%* :40%*	10%*:20%*:40%*
— trustees and personal representatives	40%*	40%*
General exemption limit	£8,800	£8,500
*subject to taper relief where available
INHERITANCE TAX	Transfers after 5/4/2006
Threshold	£285,000
(previously £275,000 for transfers after 5 April 2005)
Death rate	40%
VAT
Standard rate	17.5%
Registration threshold after 31 March 2006	£61,000
(previously £60,000 after 31 March 2005)
NATIONAL INSURANCE		2006/07
(2005/06 in brackets where different)
Class 1 contributions
Not contracted out
The employee contribution is 11% of earnings between £97 (£94) and £645 (£630) p.w. plus 1% of all earnings above £645 (£630) p.w. The employer contribution is 12.8% of all earnings in excess of the first £97 (£94) p.w.
Contracted out
The ‘not contracted out’ rates for employees are reduced on the band of earnings from £97 (£94) p.w. to £645 (£630) p.w. by 1.6%. For employers, they are reduced on the band of earnings from £97 (£94) p.w. to £645 (£630) p.w. by 3.5% for employees in salary-related schemes or 1.0% for employees in money purchase schemes. In addition, there is an employee rebate of 1.6% and an employer rebate of 3.5% or 1.0%, as appropriate, on earnings from £84 (£82) p.w. up to £97 (£94) p.w.
Class 1A and 1B contributions		12.8%
Class 2 contributions
Flat weekly rate	£2.10	(£2.10)
Exemption limit	£4,465	(£4,345)
Class 3 contributions
Flat weekly rate	£7.55	(£7.35)
Class 4 contributions
8% on the band of profits between £5,035 (£4,895) and £33,540 (£32,760) plus 1% on all profits above £33,540 (£32,760).
click here to print this page