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

PERSONAL TAXATION	2008/09	2007/08
Personal allowance
general	£5,435	£5,225
aged 65 or over in year of assessment	£9,030	£7,550
aged 75 or over in year of assessment	£9,180	£7,690
age allowance income limit	£21,800	£20,900
minimum where income exceeds limit	£5,435	£5,225
Married couple’s allowance (10% relief)
either partner born before 6 April 1935	£6,535	£6,285
either partner aged 75 or over in year of assessment	£6,625	£6,365
age allowance income limit	£21,800	£20,900
minimum where income exceeds limit	£2,540	£2,440
Blind person’s allowance	£1,800	£1,730
Income tax rates
Starting rate	10%	10%
on income up to	£2,320*	£2,230
Basic rate	20%	22%
on taxable income up to	£36,000	£34,600
Higher rate	40%	40%
on taxable income over	£36,000	£34,600
Lower rate
on certain savings income	–	20%
Lower rate on dividend income	10%	10%
Higher rate on dividend income	32.5%	32.5%
*Starting rate applies only to savings income for 2008/ 09. If taxable non-savings income is above this limit, the starting rate is not applicable.
COMPANY TAXATION	FY2008	FY2007
Corporation tax rates
All companies (except below)	28%	30%
Companies with small profits	21%	20%
— 21%/20% rate limit	£300,000	£300,000
— marginal relief limit	£1,500,000	£1,500,000
— marginal relief fraction	7/400	1/40
— marginal rate	29.75%	32.5%
For certain profits from oil activities, the full rate and small profits rate are 30% and 19% respectively for both years, the marginal relief fraction is 11/400 and the marginal rate is 32.75%.
CAPITAL GAINS TAX	2008/09	2007/08
Rate— general	18%*	10%*:20%* :40%*
— trustees and personal representatives	18%*	40%*
General exemption limit	£9,600	£9,200
*subject to available reliefs
INHERITANCE TAX		Transfers after 5/4/2008
Threshold		£312,000
(previously £300,000 for transfers after 5 April 2007)
Death rate		40%
VAT
Standard rate		17.5%
Registration threshold after 31 March 2008		£67,000
(previously £64,000 after 31 March 2007)
NATIONAL INSURANCE		2008/09
(2007/08 in brackets where different)
Class 1 contributions
Not contracted out
The employee contribution is 11% of earnings between £105 (£100) and £770 (£670) p.w. plus 1% of all earnings above £770 (£670) p.w. The employer contribution is 12.8% of all earnings in excess of the first £105 (£100) p.w.
Contracted out
The ‘not contracted out’ rates for employees are reduced on the band of earnings from £105 (£100) p.w. to £770 (£670) p.w. by 1.6%. For employers, they are reduced on the band of earnings from £105 (£100) p.w. to £770 (£670) p.w. by 3.7% for employees in salary-related schemes or 1.4% for employees in money purchase schemes. In addition, there is an employee rebate of 1.6% and an employer rebate of 3.7% or 1.4%, as appropriate, on earnings from £90 (£87) p.w. up to £105 (£100) p.w.
Class 1A and 1B contributions		12.8%
Class 2 contributions
Flat weekly rate	£2.30	(£2.20)
Exemption limit	£4,825	(£4,635)
Class 3 contributions
Flat weekly rate	£8.10	(£7.80)
Class 4 contributions
8% on the band of profits between £5,435 (£5,225) and £40,040 (£34,840) plus 1% on all profits above £40,040 (£34,840).