Budget Report 2004/05 Budget Report 2004/05 Graphic

About This Guide
Income Tax
Capital Gains Tax
Corporation Tax
Main Capital Allowances
Value Added Tax
Inheritance Tax
Vehicle Benefits
Mileage Allowance
National Insurance Contributions
Key Dates And Deadlines
Pension Premiums
Charitable Giving
Savings and Investments
Some Useful Rates
Stamp Taxes

Income Tax

Tax rates Note 2005/06 2004/05
Starting rate band to £2,090 £2,020
Tax rate 10% 10%
Basic rate band - next £30,310 £29,380
Non-savings rate 22% 22%
Savings rate 20% 20%
UK dividend rate 10% 10%
Higher rate - taxable income over £32,400 £31,400
Higher tax rate 40% 40%
UK dividend rate 32.5% 32.5%
Trusts    
Tax rate 40% 40%
UK dividend rate 32.5% 32.5%
Allowances that reduce taxable income    
Personal allowance (PA) under 65 1 £4,895 £4,745
  65 to 74 1,3 £7,090 £6,830
  75 and over 1,3 £7,220 £6,950
  Blind person's allowance   £1,610 £1,560
Allowances that reduce tax    
Married couple's allowance (MCA)      
Tax reduction 71 to 74 1,2,3 £590.50 £572.50
  75 and over 1,2,3 £597.50 £579.50
The age-related allowances are progressively withdrawn if income exceeds £19,500 £18,900
Minimum PA £4,895 £4,745
Minimum MCA tax reduction £228 £221
Tax Shelters    
Enterprise Investment Scheme (EIS) up to £200,000 £200,000
Venture Capital Trust (VCT) up to £200,000 £200,000
Golden Handshake max. £30,000 £30,000
Rent a Room - exempt on gross annual rent up to £4,250 £4,250

Notes

  1. Ages are as the end of the tax year. Ages for the MCA relate to the elder of husband or wife.
  2. MCA is available only to those couples where at least one spouse was born before 6 April 1935.
  3. The higher rates of personal allowances are reduced by £1 for each £2 of excess income over £19,500 (2004/05 £18,900) until the basic allowance is reached. Similar limits apply to the married couple's allowance: the loss of tax reduction is 10p for each £2 of excess income (only the husband's income is taken into account) until the minimum of £228 (2004/05 £221) is reached.