Income Tax Personal Allowances & Taxable Bands - 2008/9

You can access the Income Tax Allowances for 2006/7 and 2007/8 here.

Income tax allowances	2007-08 (£)	2008-09 (£)
Personal allowance	5,225	5,435
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. 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.

Income tax: Taxable Bands

2007-08	£ per year	2008-09	£ per year
Starting rate: 10%	£0-£2,230	-	-
Basic rate: 22%	£2,231-£34,600	Basic rate: 20%*	£0-£36,000
Higher rate: 40%	Over £34,600	Higher rate: 40%*	Over £36,000

*There will be a new 10% starting rate for savings income only, with a limit of £2320. If an individual's taxable non-savings income is above this limit then the 10% savings rate will not be applicable. There are no changes to the 10% dividend ordinary rate or the 32.5% dividend upper rate.

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Sign Up! - Make sure you sign up to our FREE weekly newsletter for the latest tax news and advice for small companies. Posted March 12, 2008

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