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UK Fact-File Part 2:
Individual Business Domestic Taxation

2.3 UK Individual Income Tax Rates and Bands

Following the removal of the 10% starting rate, individuals in the UK paid income tax in two bands and do not pay Corporation Tax. The tax-free allowance for those aged under 65 for 2010-11 is GBP7,475.

Income of up to GBP37,400 faces a 20% rate of personal income tax (reduced from 22% prior to 2008), with a 40% rate imposed on income exceeding that amount.

From the 2010-11 tax year, a 50% rate is imposed on income exceeding GBP150,000. Also from the 2010-11 tax year, the personal tax allowance is being gradually withdrawn for all individuals with adjusted net incomes of more than GBP100,000. HM Revenue and Customs gives further information on personal allowances here: http://www.hmrc.gov.uk/rates/it.htm .

Notwithstanding personal allowances, a self-employed individual will be able to offset allowable costs and expenses when calculating income tax liability and this is done via the self-assessment system.


 

Introductory Guides

Brief, clearly written summaries with links to relevant sections of the Fact-File. The Fact-File itself is linked in full below.

 

Fact-File

Part 1: UK Business Formation for Individuals

  1. UK Individual Business Structures
  2. UK Individual Business Registration
  3. UK Individual Business Registration Cost
  4. UK Individual Business Licensing
  5. UK Foreigners in Business
  6. UK Business Organisations
  7. UK Business Accounting
  8. UK Family Business Ownership
  9. UK Venture Capital
  10. UK Individual Business Franchises

Part 2: UK Individual Business Domestic Taxation

  1. UK Individual Business Tax Residence Rules
  2. UK Permanent Establishment
  3. UK Individual Income Tax Rates and Bands
  4. UK Personal Allowances and Business Deductions
  5. UK Husband and Wife Partnerships
  6. UK Partnership Income Taxation
  7. UK Limited Companies Income Taxation
  8. UK Business Profit Retention
  9. UK Business Losses
  10. UK Value Added Tax (VAT)
  11. UK Individual Business Capital Gains Tax (CGT)
  12. UK Individual Business Other Taxes
  13. UK Individual Artists Royalties
  14. UK Individual Business Tax-Efficient Profit Distribution

Part 3: UK Individual Business International Taxation

  1. UK Individual Business International Tax Liability
  2. UK Individual Business Withholding Taxes
  3. UK Double Tax Treaties

Part 4: UK Individual Business Tax-Efficient Structures

  1. UK Individual Business Trusts and Foundations
  2. UK Individual Business for Non-Residents
  3. UK Individual Business use of Offshore
  4. UK Controlled Foreign Corporation (CFC) Rules
  5. UK Personal Estate and Inheritance Planning

Part 5: UK Small Business Incentive Programs

  1. UK Small Business Support Schemes
  2. UK Training Incentive Schemes
  3. UK R&D Tax Credits
  4. UK Individual Business Tax Holidays

Part 6: UK Individual Business Employment Issues

  1. UK Individual Business Employer Responsibilities
  2. UK Employment vs Self-Employment Tax Issues
  3. UK Apprenticeship and Work Experience Schemes
  4. UK Employee Dismissal Rules
  5. UK Business Owner Employment and Invoicing Rules

Part 7: UK Business Owner Welfare and Lifestyle

  1. UK Business Social Security
  2. UK Business Domestic Pensions
  3. UK Offshore and International Pensions
  4. UK Individual Business Healthcare
  5. UK Individual Business Banking Services
  6. UK Education
  7. UK Individual or Business Leaving UK
  8. UK Domestic Real Estate
  9. UK International Real Estate