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2012/13 Tax rates and allowances

Income tax rates and allowances

Taxable income £
Basic rate band £34,370
Basic tax rate 20%
Dividend ordinary rate 10%
Savings rate band £2,710
Savings rate 10%
Higher rate band £34,371 - £150,000
Higher rate tax 40%
Dividend higher rate tax 32.50%
Additional rate band Over £150,000
Additional rate tax 50%
Dividend additional rate tax 42.50%
Allowances that reduce taxable income:  
Personal allowances:  
Age under 65* £8,105
Age 65-74** £10,500
Age 75 and over** £10,660
Blind person's allowance £2,100
Allowances that reduce tax:  
Married couple's allowance (MCA)***:  
 Age 78 and over £7,705
 Tax reduction at 10% £770.50

*The minimum personal allowance is reduced, by £1 for each £2 of income from £100,000 to £116,210, irrespective of age.

**Age related allowances are reduced by £1 for each £2 of income above £25,400 until the non-age related personal allowance of £8,105 is reached.

***The age for MCA is of the elder spouse or civil partner. The loss of tax reduction is 10p for each £2 of income above £25,400 until the minimum of £296 is reached.

2012/13 national insurance rates

 Class 1:  
Earnings per week: Employee NIC rate (primary):
Below £107 (lower earnings limit LEL) 0%
£107 to £146 (primary threshold PT)* 0%
£146 to £817 (upper earnings limit UEL) 12%
Above £817 2%
Employees' contracted out rate rebate 1.40%
 Earnings per week: Employer NIC rate (secondary)
Below £144 0%
Above £144 13.8%

* No NICs are actually payable but a notional Class 1 NIC is deemed to have been paid in respect of earnings between LEL and PT to protect contributory benefit entitlement.

2012/13 self employed national insurance contribution rates

Annual profits (£) a year*: Class 2**: Class 4:
Below £5,595 (SEE)*** £0pw 0%
£5,595 to £7,605 (LPL) £2.65pw 0%
£7,605 to £42,475 (UPL) £2.65pw 9%
Above £42,475  £2.65pw 2%

* The limits are defined as SEE - small earnings exception; LPL - lower profits limit and UPL - upper profits limit.

** Class 2 NICs are paid at a weekly flat rate of £2.65 by all self employed persons unless they have applied for a small earnings exception.

*** The self-employed may apply for exception from paying Class 2 contributions if their earnings are less than, or expected to be less than, the level of the small earnings exception.

2012/13 other national insurance contributions rates

Married women's reduced rate* 5.85%
Special Class 2 rate for share fishermen £3.30pw
Special Class 2 rate for volunteer development workers £5.35pw
Class 3 rate** £13.25pw

*Married women's reduced rate is paid only by maried women and certain widows with valid reduced rate elections.

**Class 3 NICs are paid by contributors to make the year a qualifying year for basic State Pension and Bereavement Benefit purposes.

2012/13 working and child tax credit rates and thresholds

Working Tax Credit*:  
Basic element £1,920
Couple and lone parent element £1,950
30 hour element £790
Disabled worker element £2,790
Severe disability element £1,190
Childcare element:  
maximum eligible cost for one child £175pw
maximum eligible cost two or more children £300pw
per cent of eligible costs covered 70%
Child Tax Credit:  
Family element £545
Child element £2,690
Disabled child element £2,950
Severely disabled child element £1,190
Income thresholds and withdrawal rates**:  
Income threshold £6,420
Withdrawal rate (per cent) 41%
First threshold for those entitled to Child Tax Credit only £15,860
Income rise disregard £10,000
Income fall disregard £2,500

* As announced in the June Budget 2010, the 50 plus element of the Working Tax Credit will be removed from April 2012.

** As announced in the June Budget 2010, the family element of the Child Tax Credit will taper immediately after the child element from April 2012.

2012/13 child benefit and guardian's allowance

Child Benefit:  
First child rate £20.30
Rate for additional children £13.40
Guardian's Allowance: £15.55

2012/13 tax-free savings accounts

Individual Savings Account (ISA) subscription limit:  
Overall limit £11,280
of which cash £5,640
of which stocks & shares £11,280
Junior ISA subcription limit: £3,600
Child Trust Fund (CTF) subscription limit: £3,600

Air passenger duty (APD)

APD distance bands APD rates (£ per passenger from 1 April 2012) 
Miles from UK  Reduced rate* Standard rate**
 Band A (0-2000)  £13  £26
 Band B (2001-4000)  £65  £130
 Band C (4001-6000)  £81  £162
Band D (over 6000) £92 £184

* In lowest class of travel

** In other than lowest class of travel

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