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This guide has been prepared from the Chancellor’s Budget Speech and official Government press releases. Budget proposals are subject to
amendment during the course of the Finance Bill through Parliament. You should consult Keelings or your usual accountants before making decisions on the basis of infomation given herein. For a free printed copy of
this tax guide, call Keelings.
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Personal Allowances
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Personal allowance
Married couple’s*
Children’s tax credit*
Age relief 65-74
Personal allowance
Married couple’s*
Age relief 75 and over
Personal allowance
Married couple’s*
Age reliefs reduced (subject to minima) by half for income over
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2001/02 (£)
4,535
2,070§
5,200
5,990
5,365§
6,260
5,435§
17,600
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2000/01 (£)
4,385
2,000§
-
5,790
5,185§
6,050
5,255§
17,000
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* Relief restricted to 10%.
§ Only available if either spouse born before 6 April 1935.
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Capital Gains Tax
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Exemptions
- Individuals
- Most trusts
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2001/02
£
7,500
3,750
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2000/01
£
7,200
3,600
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Tax Rates
Individuals: as savings rates
Trusts and Estates: 34%
Taper Relief
The percentage of gain chargeable depends on the type of asset and the number of complete years it has been held since 6 April
1998.
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No. of years
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Business Asset
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Non-business Asset
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0
1
2
3
4
5
6
7
8
9
10 or more
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100
87.5
75
50
25
25
25
25
25
25
25
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100
100
100
95
90
85
80
75
70
65
60
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Retirement relief* - For disposals in 2001/02 full relief available for the first £100,000 of gains; 50% relief available on gains between
£100,000 and £400,000.
* Relief to cease on 5 April 2003.
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Income Tax Rates
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2001/02
10% on first
22% on next
40% on taxable income above
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£
1,880
27,520
29,400
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2000/01
10% on first
22% on next
40% on taxable income above
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£
1,520
26,880
28,400
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Pensions
Stakeholder
Can contribute up to £3,600 gross to a
stakeholder pension. Higher contributions can be paid based on the percentage of net earnings which apply for personal pensions.
Personal Pension (PPP) and Retirement Annuities (RAP)
% of net relevant earnings
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Age on 6 April
35 or less
36-45
46-50
51-55
56-60
61-75
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PPP*
17.5
20.0
25.0
30.0
35.0
40.0
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PPP*
17.5
17.5
17.5
20.0
22.5
27.5
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* No relief for contributions on earnings over £95,400 (£91,800 in 2000/01)
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Inheritance Tax
Taxable estate & gifts
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From
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6.4.01 (£)
First: 242,000
over 242,000
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6.4.00 - 5.4.01 (£)
First: 234,000
over 234,000
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Rate (%)
nil
40%
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Main exemptions
Annual gifts per donor 3,000
Small gifts per donee 250
Gifts within 7 years of death
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£
3,000
250
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Years
% *
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0-3
100
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3-4
80
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4-5
60
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5-6
40
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6-7
20
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* of death rate charge
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National Insurance Contributions
Class I Employed
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Employees
First £72.00 per week
Next £15.00 per week
Next £488.00 per week
Employers
First £87.00 per week
Next £488.00 per week
Above £575.00 per week
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Contracted in
nil
0%§
10%
nil
11.9%*
11.9%
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Contracted out
nil
0%§
8.4%
nil
8.9%*
11.9%
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§ Treated as paid Class I NIC.
* For salary-related schemes only. The rate for money-purchase schemes is 11.3%.
Class IA Employers on benefits in kind 11.9%
Class IB Employers 11.9%
Class II Self-employed £2.00 per week.
Exemption available if net earnings £3,955 or less.
Class III Voluntary rate of £6.75 per week.
Class IV Self-employed 7% of net profits between £4,535 and £29,900
(maximum £1,775.55).
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Corporation Tax
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Financial year
from 1 April
Starting rate
Small company rate
Full rate
Marginal rate
Marginal rate
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Profits
to £10,000
£50,000 -300,000
above £1,500,000
£10,000 -£50,000
£300,000 - £1,500,000
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2001
(31.3.02)
10%
20%
30%
22.5%
32.5%
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2000
(31.3.01)
10%
20%
30%
22.5%
32.5%
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Value Added Tax
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Standard rate
Reduced rate
Turnover Thresholds
Registration
Deregistration
Cash Accounting
Annual Accounting
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17.5%
5%
From 1.4.01
£54,000
£52,000
£600,000
£600,000
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From 1.4.00
£52,000
£50,000
£350,000
£300,000
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Tax Efficient Investments
Individual Savings Accounts
Annual Limit to 2006. £7,000
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Split
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a) Up to limit in shares
b) Up to £3,000 in savings
c) Up to £1,000 in life insurance
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16 and 17 year olds may have a savings ISA.
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Car and Fuel Benefits
Car benefit †
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Business miles driven
0 to 2,499
2,500 to 17,999
18,000 or more
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% list price*
35%
25%
15%
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* List price includes extras & delivery
† Cars over 4 years on 5 April reduce benefit by 25%.
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Car petrol (diesel) benefit
1,400cc or less
1,401–2,000cc
Over 2,000cc
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2001/02
1,930 (2,460)
2,460 (2,460)
3,620 (3,620)
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2000/01
1,700 (2,170)
2,170 (2,170)
3,200 (3,200)
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Car and fuel benefits liable to employer’s Class IA NIC.
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Stamp Duty
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Land/property:
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if cost
£60,001–£250,000
£250,001–£500,000
over £500,000
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1.0% on total
3.0% on total
4.0% on total
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Stocks and marketable securities
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0.5%
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Tax Free Mileage Rates
Cars
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First 4,000 miles
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Over 4,000 miles
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Engine capacity
0 –1,000cc
1,001 –1,500cc
1,501 –2,000cc
Over 2,000cc
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2001/02
40p
40p
45p
63p
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2000/01
28p
35p
45p
63p
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2001/02
25p
25p
25p
36p
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2000/01
17p
20p
25p
36p
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Motorcycles
Bicycles
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24p/mile
12p/mile
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