Income Tax

	2008-09	2007-08
Starting rate band to	*£2,320	£2,230
Tax Rate	*10%	10%
Basic rate band	£36,000	£32,370
Basic rate	20%	22%
Savings rate	20%	20%
Dividend ordinary rate	10%	10%
Higher Rate - income over	£36,000	£34,600
Higher Tax Rate	40%	40%
Dividend upper rate	32.5%	32.5%
*10% starting rate only available for savings income up to £2,320. Not applicable if taxable non-savings income exceeds £2,320.
Allowances that Reduce Taxable Income
Personal allowances (PA)
- under 65	£5,435	£5,225
- 65 to 74	£9,030	£7,550
- 75 and over	£9,180	£7,690
Allowances that Reduce Tax
Married couples allowance (MCA)
Tax reduction
- 74	£653.50	£628.50
- 75 and over	£662.50	£636.50

Ages are as at the end of the tax year. The age related allowances are progressively withdrawn if income exceeds	£21,800	£20,900
Minimum PA	£5,435	£5,225
Minimum MCA tax reduction	£254	£244
Tax Shelters
Enterprise Investment Scheme up to	**£500,000	£400,000
Venture Capital Trust up to	£200,000	£200,000
Rent a room exempt on gross annual rent	£4,250	£4,250
Construction Industry Scheme deduction rate	20/30%	20/30%
** start date subject to European Commission approval