inspire: financial management
Corporation/Employers Tax Rates & Allowances 2007/08
Corporation Tax
Years to 31.03.08 Years to 31.03.07
|
Profits Band £ |
Rates % |
Profits Band £ |
Rates % |
|
| Small companies rate | 0 - 300,000 | 20 | 50,001 - 300,000 | 19 |
| Marginal (small companies) rate |
300,00 - 1,500,000 | 32.50 | 300,00 - 1,500,000 | 32.75 |
| Full rate | Over 1,500,000 | 30 | Over 1,500,000 | 30 |
| Small companies fraction | 1/40 | 11/400 |
The profits limits are reduced for accounting periods of less than 12 months and for a company with associated companies.
Capital Allowances
| Writing Down Allowance | |
| Plant and machinery* | 25% # reducing balance |
| Motor cars | 25% reducing balance (£3,000 max) |
| Industrial buildings | 4% (straight line) |
| Agricultural buildings | 4% (straight line) |
| Hotels | 4% (straight line) |
*For small businesses: first year allowances (FYAs) of 50% for 12 months from 06.04.06 (01.04.06 for companies). 40% otherwise.
For medium-sized businesses: FYAs of 40%.
For all businesses: 100% FYAs on expenditure on energy saving plant and machinery.
**100% FYAs on new cars with CO2 emissions not exceeding 120 gm/km until 31.03.08.
# 6% on certain life long assets.
Value Added Tax
| Standard rate | 17.5% |
| Reduced rate | 5% |
| Annual Registration Limit - from 01.04.07 (01.04.06 - 31.03.07 £61,000) | 64000 |
| Annual Deregistration Limit - from 01.04.07 (01.04.06 - 31.03.07 £59,000) | 62000 |
Flat Rate Scheme - allows businesses to calculate their VAT payment as a percentage of their VAT inclusive turnover.
Limits - annual VAT exclusive taxable turnover does not exceed £150,000 and total VAT exclusive annual turnover does not exceed £187,500. Leave on anniversary of scheme where total VAT inclusive annual turnover exceeds £225,000.
Cash Accounting - allows businesses to account for input and output VAT on a paid and received basis.
Limits from 1 April 2007 - where annual VAT exclusive taxable turnover does not exceed £1,350,000. Leave at end of a VAT period where annual VAT exclusive taxable turnover exceeds £1,600,000
Annual Accounting - allows businesses to smooth out cash flow by paying a set amount, either monthly or quarterly. Only one VAT return due a year.
Limits - where annual VAT exclusive taxable turnover does not exceed £1,350,000. Leave on anniversary of scheme where annual VAT exclusive taxable turnover exceeds £1,600,000.
Car, Van and Fuel Benefits
Company cars 2007/08 and 2006/07
| CO2 emissions (gm/km) (round down to nearest 5gm/km) | % of car's list price taxed | Fuel benefit (£14,400 x %) |
| Up To 140 | 15 | 2,160 |
| 145 | 16 | 2,304 |
| 150 | 17 | 2,448 |
| 155 | 18 | 2,592 |
| 160 | 19 | 2,736 |
| 165 | 20 | 2,880 |
| 170 | 21 | 3,024 |
| 175 | 22 | 3,168 |
| 180 | 23 | 3,312 |
| 185 | 24 | 3,456 |
| 190 | 25 | 3,600 |
| 195 | 26 | 3,744 |
| 200 | 27 | 3,888 |
| 205 | 28 | 4,032 |
| 210 | 29 | 4,176 |
| 215 | 30 | 4,320 |
| 220 | 31 | 4,464 |
| 225 | 32 | 4,608 |
| 230 | 33 | 4,752 |
| 235 | 34 | 4,896 |
| 240 and above | 35 | 5,040 |
Company cars
- For diesel cars add a 3% supplement, but maximum still 35%. This is waived for Euro IV diesels. For 2006/07, no waiver for diesels registered on/after 1 January 2006.
- Discounts apply to certain environmentally friendly cars.
- For cars registered before 01.01.98 charge is based on engine size.
- The list price includes accessories and is subject to an upper limit of £80,000.
- List price is reduced for capital contributions made by the employee up to £5,000.
Fuel benefits
- The fuel benefit charge is proportionately reduced if provision of private fuel ceases part way through the year.
- The fuel benefit is reduced to nil only if the employee pays for all private fuel.
Van benefit per vehicle - 2006/07 and 2005/06
2007/08 |
2006/07 |
| Van benefit £3000 | Under 4 years old £500* |
| Fuel benefit £500 | Over 4 years old £350* |
Vehicles under 4 years old - £500
Vehicles at least 4 years old - £350
Notes
1.The charges will not apply if a 'restricted private use condition' is met throughout the tax year.
2. Van benefits include fuel for private use.
Mileage Allowances
2007/08 & 2006/07 Rate per Mile
| Cars and Vans | Up to 10,000 Miles - 40p |
| Over 10,000 Miles - 25p | |
| Bicycles | 20p |
| Motorcycles | 24p |
These rates represent the maximum tax-free mileage allowances for employees using their own vehicles for business. Any excess is taxable. If the employee receives less than the statutory rate, tax relief can be claimed on the difference.
National Insurance
| Class 1 (employed) contracted in | 2007/08 | |
| Weekly earnings | Employer | Employee |
| Up to £100 | Nil* | Nil* |
| £100.01 — £670 | 12.8%** | 11%** |
| Over £670 | 12.8%** | £62.70 + 1%*** |
* Entitlement to contribution-based benefits retained for earnings between £87.01 and £100 per week.
** On earnings above £100
*** On earnings above £670
| Class 1A (employers) | 12.8% on employee taxable benefits |
| Class 1B (employers) | 12.8% on PAYE Settlement Agreements |
| Class 2 (self-employed) | flat rate per week £2.20 |
| Small earnings exemption p.a. £4,635 | |
| Class 3 (voluntary) | flat rate per week £7.80 |
| Class 4 (self-employed) | 8% on profits between £5,225 and £34,800 plus 1% on profits over £34,840 |
