of 15
8/6/2019 Taxation in UK
1/15
8/6/2019 Taxation in UK
2/15
Tax year in U.K
The tax year in the UK, which applies
to income tax and other personal
taxes, runs from 6 April in one year to
5 April the next (for income tax
purposes). Hence the 2010-11 tax yearran from 6 April 2010 to 5 April 2011
8/6/2019 Taxation in UK
3/15
UK taxation receipts for the tax year 2008-2009
29%
19%
15%
9%
5%
5%
4%
8/6/2019 Taxation in UK
4/15
Types of taxes :
Income tax
Inheritance tax
Council tax
Value added tax Excise duties
Stamp duties
Motoring tax Corporate tax
National Insurance
contributions
Capital gains tax
Business rates
Exemptions on
Investment
8/6/2019 Taxation in UK
5/15
Income tax :
RateDividend
incomeSavings income
Other income
(inc
employment)
Band (above
any personal
allowance)
Lower rate N/A 10% N/A
0 - 2440applies only if total
income falls in this
band
Basic rate 10% 20% 20% 0 - 37,400
Higher rate 32.5% 40% 40% over 37,400
Additional rate 42.5% 50% 50% over 150,000
8/6/2019 Taxation in UK
6/15
Inheritance tax
Inheritance tax is levied on "transfers of value",
meaning:
the estates of deceased persons; gifts made within seven years of death
"lifetime chargeable transfers", meaning transfers
into certain types of trust.
8/6/2019 Taxation in UK
7/15
Council Tax
Band Value Ratio Ratio as % Average
A up to 40,000 6/9 67% 845
B
40,001 to
52,000 7/9 78% 986
C52,001 to
68,0008/9 89% 1,127
D68,001 to
88,0009/9 100% 1,268
E88,001 to
120,000 11/9 122% 1,550
F120,001 to
160,00013/9 144% 1,832
G160,001 to
320,00015/9 167% 2,113
H320,001 and
above 18/9 200% 2,536
The basis for the tax is residential property, with discounts forsingle people
8/6/2019 Taxation in UK
8/15
Value Added Tax (VAT )
The third largest source of government revenues is
value added tax (VAT), charged at 20% on supplies ofgoods and services. It is therefore a tax on consumer
expenditure
8/6/2019 Taxation in UK
9/15
8/6/2019 Taxation in UK
10/15
Stamp Duties
Stamp duty is charged on the transfer of shares and
certain securities at a rate of 0.5%. Modernisedversions of stamp duty, stamp duty land tax and
stamp duty reserve tax, are charged respectively on
the transfer of real property and shares and
securities, at rates of up to 4% and 0.5%respectively
8/6/2019 Taxation in UK
11/15
Motoring Tax
Motoring taxes include: fuel duty (which itself also
attracts VAT), and vehicle excise duty. Other fees and
charges include the London congestion charge, and insome areas on-street parking (as well as associated
charges for violations).
8/6/2019 Taxation in UK
12/15
Corporate Tax
Corporation tax is a tax levied in the United
Kingdom on the profits made by companies and
on the profits of permanent establishments ofnon-UK resident companies and associations that
trade in the EU. Due to tax competition this main
tax was reduced to 28% and is expected to be
reduced again to 26%
8/6/2019 Taxation in UK
13/15
NationalInsurance contributions
National insurance contribution falls into classes
depending on each employees' position and salary.This tax is also paid by the employer around 12% on
each employee who earns over the lower earnings
threshold.
8/6/2019 Taxation in UK
14/15
Capital Gains Tax
A capital gain is a profit that results from
investments into a capital asset, such as
stocks, bonds or real estate. Capital gains are
subject to tax at 18-28%.
8/6/2019 Taxation in UK
15/15
ExemptionsMany holdings and income from them are exempt for
"historical reasons". These include:
Special, low tax arrangements for the monarchy, such asthe arrangement used by the British Royal Family to avoid
inheritance taxation.
Reduced income tax for special classes of people, who
claim to be resident in the UK but not "domiciled".
The income of charities is usually exempt from UK income
tax.