O'Haras Chartered Accountants, Registered Auditors, Business Advisors

Tax Reliefs and Bands

Main Income Tax Reliefs
	2008/09	2007/08
Allowances that reduce taxable income
Personal allowance	£6,035	£5,225
Personal allowance (65 – 74)*	£9,030	£7,550
Personal allowance (75 +)*	£9,180	£7,690

Allowances that reduce tax
Min. Married Couple's Allowance tax reduction	£254	£244
Income limit for age related allowances	£21,800	£20,900

* Ages are at the end of the tax year. Ages for MCA relate to the elder spouse. The age related allowances are progressively withdrawn if income exceeds the limit for age related allowances above, reducing first PA and then MCA. PA cannot fall below £5,435 and MCA tax reduction cannot fall below £254 (2007/08 £244).

Note: 10% starting rate only available for savings income up to £2,320. Not applicable if taxable non-savings income exceeds £2,320.

Income Tax Bands
		2008/09	2007/08

Lower rate on first		£2,320	£2,230
Basic rate on next		£36,000	£32,370
Higher rate at taxable income over		£36,000	£34,600

Income Tax Rates 2008/09

Rates differ for Dividends/Interest/Other	D	I	O
Starting rate	10%	10%	20%
Basic rate	10%	20%	20%
Higher rate	32.5%	40%	40%

Dividends taxed as highest part of income, then interest.