Businesses (including Sole traders and Limited Companies)
need to be aware of the latest changes to personal allowance.
·
National
Insurance
Personal Allowance has risen from £5715 to £7225,
which is very welcoming, however, please do note that the rate payable has also
risen by 1%. So for instance Class 4 rate used to be
8% between lower profits limit and upper profits limit it is now 9%. Please
see table 1, taken from www.hmrc.gov.uk
·
Income Tax
Personal Allowance has risen from £6475 to
£7475. Please see table 2, taken from www.hmrc.gov.uk
Table 1
|
National Insurance Contributions
|
|
|
£ per week
|
2011-12
|
|
Lower earnings limit, primary Class 1
|
£102
|
|
Upper earnings limit, primary Class 1
|
£817
|
|
Upper accrual point
|
£770
|
|
Primary threshold
|
£139
|
|
Secondary threshold
|
£136
|
|
Employees’ primary Class 1 rate
between primary threshold and upper earnings limit
|
12%
|
|
Employees’ primary Class 1 rate above
upper earnings limit
|
2%
|
|
Class 1A rate on employer provided
benefits (1)
|
13.8%
|
|
Employees’ contracted-out rebate
|
1.6%
|
|
Married women’s reduced rate between
primary threshold and upper earnings limit
|
5.85%
|
|
Married women’s rate above upper earnings
limit
|
2%
|
|
Employers’ secondary Class 1 rate
above secondary threshold
|
13.8%
|
|
Employers’ contracted-out rebate,
salary-related schemes
|
3.7%
|
|
Employers’ contracted-out rebate,
money-purchase schemes
|
1.4%
|
|
Class 2 rate
|
£2.50
|
|
Class 2 small earnings exception
|
£5,315 per year
|
|
Special Class 2 rate for share
fishermen
|
£3.15
|
|
Special Class 2 rate for volunteer
development workers
|
£5.10
|
|
Class 3 rate
|
£12.60
|
|
Class 4 lower profits limit
|
£7,225 per year
|
|
Class 4 upper profits limit
|
£42,475 per year
|
|
Class 4 rate between lower profits
limit and upper profits limit
|
9%
|
|
Class 4 rate above upper profits
limit
|
2%
|
|
Additional primary Class 1 percentage
rate on deferred employments
|
2%
|
|
Additional Class 4 percentage rate
where deferment has been granted
|
2%
|
Table 2
|
Income Tax allowances table
|
|
Income Tax allowances
|
2011-12
|
|
Personal Allowance (1)
|
£7,475
|
|
Income limit for Personal Allowance
|
£100,000
|
|
Personal Allowance for people aged
65-74 (1)(2)
|
£9,940
|
|
Personal Allowance for people aged 75
and over (1)(2)
|
£10,090
|
|
Married Couple's Allowance (born
before 6th April 1935 but aged under 75) (2)(3)(4)
|
Not applicable
|
|
Married Couple’s Allowance (born
before 6th April 1935 and aged 75 and over) (2) (3)
|
£7,295
|
|
Income limit for age-related
allowances
|
£24,000
|
|
Minimum amount of Married Couple's
Allowance
|
£2,800
|
|
Blind Person's Allowance
|
£1,980
|
