Tax Numbers for 2011/12

Newsletter issue - January 2011.

Most of the tax rates and thresholds for 2011/12 were announced on 2 December 2010 as follows:

Personal Allowances

Under 65: £7,475
65-74: £9,940
75 and over: £10,090
Minimum marriage allowance*: £2,800
Maximum marriage allowance: £7,295
Blind person's allowance: £1,980
Income limit for under 65 personal allowance: £100,000
Income limit for allowances for those aged 65 or more: £24,000

* given at 10% rate and only where one partner was born before 6 April 1935.

Income Tax Rates

The tax rates for 2011/12 have been frozen at the 2010/11 levels but the threshold at which the 40% tax rate is applied is reduced to £35,000. This introduces a subtle tax increase as it pulls more people into the 40% tax bracket, and increases the amount of income subject to tax at 40%.

Savings rate* (10%): £0 - 2,560
Basic rate (20%): £0 - 35,000
Higher rate (40%): £35,001 to 150,000
Additional rate (50%): Over £150,000

* Only applies to savings income such as interest where earned income is covered by allowances or is also within this range.

NI

The rates and weekly thresholds for NI contributions will be:

Employer's class 1 above primary threshold (above £136): 13.8%
Employer's contracted out for money purchase schemes (from £136.01 to £770): 12.4%
Employer's contracted out for salary related schemes (from £139.01 to £770): 10.1%
Employees' contracted out for both schemes (from £139.01 to £770): 10.4%
Employee's class 1 not contracted out (from £139 to £817): 12%
Employee's additional class 1 (above £817): 2%
Self-employed class 4 (annual figures from £7,225 to £42,475): 9%
Self-employed class 4 additional rate (above £42,475 per year): 2%
Self-employed class 2: £2.50 per week
Voluntary contributions class 3: £12.60 per week