Income tax allowances
Income tax allowances
The following table shows how much income you can earn that is exempt from income tax.
| Allowances | 2007/2008 (£) | 2008/2009 (£) | 2009/2010 (£) |
|---|---|---|---|
| Personal allowance | 5,225 | 6,035 | 6,475 |
| Personal allowance: 65 to 74 (1) | 7,550 | 9,030 | 9,490 |
| Personal allowance: 75 and over (1) | 7,690 | 9,180 | 9,640 |
| Married couple's allowance (born before 06/04/1935 but aged under 75) (1)(2)(3) | 6,285 | 6,535 | N/A |
| Married couple's allowance - aged 75 and over (1)(2) | 6,365 | 6,625 | 6,965 |
| Income limit for age-related allowances | 20,900 | 21,800 | 22,900 |
| Minimum amount of married couple's allowance | 2,440 | 2,540 | 2,670 |
| Blind person's allowance | 1,730 | 1,800 | 1,890 |
Notes
(1) These allowances reduce where the income is above the income limit - by £1 for every £2 of income above the limit. However they will never be less than the basic Personal Allowance or minimum amount of Married Couple's Allowance.
(2) Tax relief for the Married Couple's allowance is given at the rate of 10 per cent.
(3) In the 2009-10 tax year all Married Couple's Allowance claimants in this category will become 75 at some point during the year and will therefore be entitled to the higher amount of the allowance - for those aged 75 and over.
The following table shows the current income tax rates for 2007/2008, 2008/2009 and 2009/2010.
| Rates | % | 2007/2008 (£) | % | 2008/2009 (£) | % | 2009/2010 (£) |
|---|---|---|---|---|---|---|
| Starting | 10 | 0 to 2,230 | 10* | 0 to 2,320 | 10* | 0 to 2,440 |
| Basic | 22 | 2,231 to 34,600 | 20 | 0 to 34,800 | 20 | 0 to 37,400 |
| Higher | 40 | 34,601 and above | 40 | 34,801 and above | 40 | 37,401 and above |
Notes
* From 2008-09 there is a 10 per cent starting rate for savings income only. If your taxable non-savings taxable income is above this limit then the 10 per cent starting rate for savings will not apply.
The rates available for dividends are the 10 per cent ordinary rate and the 32.5 per cent dividend upper rate.
This page was last reviewed on 18 December 2008. The information may not reflect changes in legislation made after this date.
This is only a guide to your tax position and should not be relied on in place of professional accounting or tax advice. Any calculated figures are illustrative and are based on the data you provided.
