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

PERSONAL TAXATION	2007/08	2006/07
Personal allowance
general	£5,225	£5,035
aged 65 or over in year of assessment	£7,550	£7,280
aged 75 or over in year of assessment	£7,690	£7,420
age allowance income limit	£20,900	£20,100
minimum where income exceeds limit	£5,225	£5,035
Married couple’s allowance
(10% relief)
either partner born before 6 April 1935	£6,285	£6,065
either partner aged 75 or over in year of assessment	£6,365	£6,135
age allowance income limit	£20,900	£20,100
minimum where income exceeds limit	£2,440	£2,350
Blind person’s allowance	£1,730	£1,660
Income tax rates
Starting rate	10%	10%
on taxable income up to	£2,230	£2,150
Basic rate	22%	22%
on taxable income from starting rate limit up to	£34,600	£33,300
Higher rate	40%	40%
on taxable income over	£34,600	£33,300
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	FY2007	FY2006
Corporation tax rates
All companies (except below)	30%	30%
Companies with small profits	20%	19%
— 19% rate limit	£300,000	£300,000
— marginal relief limit	£1,500,000	£1,500,000
— marginal relief fraction	1/40	11/400
— marginal rate	32.5%	32.75%
For certain profits from oil activities, all rates and limits remain the same for FY2007 as for FY2006.
CAPITAL GAINS TAX	2006/07	2005/06
Rate — general	10%*:20%* :40%*	10%*:20%*:40%*
— trustees and personal representatives	40%*	40%*
General exemption limit	£9,200	£8,800
*subject to taper relief where available
INHERITANCE TAX	Transfers after 5/4/2007
Threshold	£300,000
(previously £285,000 for transfers after 5 April 2006)
Death rate	40%
VAT
Standard rate	17.5%
Registration threshold after 31 March 2007	£64,000
(previously £61,000 after 31 March 2006)
NATIONAL INSURANCE		2007/08
(2006/07 in brackets where different)
Class 1 contributions
Not contracted out
The employee contribution is 11% of earnings between £100 (£97) and £670 (£645) p.w. plus 1% of all earnings above £670 (£645) p.w. The employer contribution is 12.8% of all earnings in excess of the first £100 (£97) p.w.
Contracted out
The ‘not contracted out’ rates for employees are reduced on the band of earnings from £100 (£97) p.w. to £670 (£645) p.w. by 1.6%. For employers, they are reduced on the band of earnings from £100 (£97) p.w. to £670 (£645) p.w. by 3.7% (3.5%) for employees in salary-related schemes or 1.4% (1%) for employees in money purchase schemes. In addition, there is an employee rebate of 1.6% and an employer rebate of 3.7% (3.5%) or 1.4% (1%), as appropriate, on earnings from £87 (£84) p.w. up to £100 (£97) p.w.
Class 1A and 1B contributions		12.8%
Class 2 contributions
Flat weekly rate	£2.20	(£2.10)
Exemption limit	£4,635	(£4,465)
Class 3 contributions
Flat weekly rate	£7.80	(£7.55)
Class 4 contributions
8% on the band of profits between £5,225 (£5,035) and £34,840 (£33,540) plus 1% on all profits above £34,840 (£33,540).
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