2007-08 and 2008-09 Rates and allowances - Income Tax

Income Tax allowances

Income Tax allowances table
Income Tax allowances 2007-08 2008-09
Personal Allowance £5,225 £6,035
Personal Allowance for people aged 65-74 (1) £7,550 £9,030
Personal Allowance for people aged 75 and over (1) £7,690 £9,180
Married Couple's Allowance (born before 6th April 1935 but aged under 75) (1)(2) £6,285 £6,535
Married Couple's Allowance - aged 75 and over (1) (2) £6,365 £6,625
Income limit for age-related allowances £20,900 £21,800
Minimum amount of Married Couple's Allowance £2,440 £2,540
Blind Person's Allowance £1,730 £1,800

(1) These allowances reduce where the income is above the income limit – by £1 for every £2 of income above the limit. However they will never be less than the basic Personal Allowance or minimum amount of Married Couple’s Allowance.
(2) Tax relief for the Married Couple's Allowance is given at the rate of 10 per cent.

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Income Tax rates and taxable bands

Income Tax rates and taxable bands
Rate 2007-08
Starting rate: 10% £0-£2,230
Basic rate: 22% £2,231-£34,600
Higher rate: 40% Over £34, 600
Income Tax rates and taxable bands
Rate 2008-09
Starting rate for savings: 10%* £0-£2,320
Basic rate: 20% £0-£34,800
Higher rate: 40% Over £34,800

* From 2008-09 there is a 10 per cent starting rate for savings income only. If your non-savings income is above this limit then the 10 per cent starting rate for savings will not apply.

The rates available for dividends are the 10 per cent ordinary rate and the 32.5 per cent dividend upper rate.

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