Planning for your self assessment tax bill
The UK tax year is 6 April to the following 5 April. So the tax year 2009/10 ends on 5 April 2010.
You will need to complete a self assessment tax return if you are self employed or a limited company director.
Click here to read our free guide on starting a business and registering with HMRC (opens in a new window).
Although the deadline is 31 January for e-filed returns, we recommend that you complete your tax return and submit it to HMRC as early as possible. Click here to download a useful pdf tax return checklist.
A self employed person will pay both income tax and class 4 national insurance (NI) on their profits plus income tax on any other income and capital gains tax on any relevant capital gains in the tax year.
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Self Assessment Tax Return Checklist 2009-10
To help you collate the information you need to prepare your self assessment tax return for 2009/10 we have prepared a useful checklist which you can download here.
In our experience, the list of income, deductions and capital transactions covers the majority of our clients but if you have other income, tax deductions or gains/losses not listed, you may need to include those on your tax return.
HM Revenue & Customs must receive your tax return by 31 January 2011 to avoid a penalty.
At HRBS we submit all tax returns online. However, if you wish to prepare a paper return, the deadline is midnight on 31 October.
The earlier you prepare your accounts and tax return the better. You can claim any refunds promptly to help your cashflow and where tax is due; you will have plenty of time to plan your tax payments.
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Tax rates and allowances
Income tax, capital gains tax, and inheritance tax rates and allowances
| per year 1 | 2009-10 | 2010-11 |
| Income tax personal and age-related allowances 2 | ||
| Personal allowance (age under 65) | £6,475 | £6,475 |
| Personal allowance (age 65-74) | £9,490 | £9,490 |
| Personal allowance (age 75 and over) | £9,640 | £9,640 |
| Married couple's allowance * (age 75 and over) | £6,965 | £6,965 |
| Married couple's allowance * - minimum amount | £2,670 | £2,670 |
| Income limit for age-related allowances | £22,900 | £22,900 |
| Blind person’s allowance | £1,890 | £1,890 |
| Capital gains tax annual exempt amount | ||
| Individuals etc. | £10,100 | £10,100 |
| Most trustees | £5,050 | £5,050 |
| Individual inheritance tax allowance | £325,000 | £325,000 |
| Pension schemes allowances | ||
| Annual Allowance | £245,000 | £255,000 |
| Lifetime Allowance | £1,750,000 | £1,800,000 |
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1 The income tax year is 6 April to 5 April. 2 From April 2010, the personal allowance will be gradually withdrawn for income over £100,000 at a rate of £1 of allowance lost for every £2 over £100,000 until it is completely removed. * Married couple's allowance is given at the rate of 10%. |
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Income tax: Taxable bands
| 2009-10 | 2010-11 | |
| Savings starting rate*: 10% | 0 - £2,440 | 0 - £2,440 |
| Basic rate: 20% | 0 - £37,400 | 0 - £37,400 |
| Higher rate: 40% | Over £37,400 | £37,401 - £150,000 |
| Additional rate : 50% | N/A | Over £150,000 |
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* only available if non savings income is less than this amount. |
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Capital gains tax rates
| 2009-10 | 2010-11 | |
| Full rate of CGT | 18% | 18% |
| Entrepreneurs' Relief fraction | 4/9 | 4/9 |
| Net rate for Entrepreneurs | 10% | 10% |
Corporation tax on profits
| per year 1 | 2009-10 | 2010-11 |
| £0-£300,000 | 21% | 21% |
| £300,001 - £1,500,000 | Marginal rate | Marginal rate |
| £1,500,001 or more | 28% | 28% |
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1 The corporation tax year is 1 April to 31 March. |
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Capital Allowances
| per year | 2009-10 | 2010-11 |
| Main writing down allowance | 20% | 20% |
| Special rate writing down allowance | 10% | 10% |
| Temporary first year-allowance | 40% | 0% |
| Annual Investment Allowance 1 | £50,000 | £100,000 |
| 1 Not available on cars and some other types of plant and machinery. | ||
National insurance contributions
| per week (unless stated) | 2009-10 | 2010-11 |
| Lower earnings limit, primary Class 1 | £95 | £97 |
| Upper earnings limit, primary Class 1 | £844 | £844 |
| Upper Accruals point | £770 | £770 |
| Primary threshold | £110 | £110 |
| Secondary threshold | £110 | £110 |
| Employees’ primary Class 1 rate between primary threshold and upper earnings limit | 11% | 11% |
| Employees’ primary Class 1 rate above upper earnings limit | 1% | 1% |
| Employees’ contracted-out rebate - salary-related schemes | 1.6% | 1.6% |
| Employees’ contracted-out rebate - money-purchase schemes | 1.6% | 1.6% |
| Married women’s reduced rate between primary threshold and upper earnings limit | 4.85% | 4.85% |
| Married women’s rate above upper earnings limit | 1% | 1% |
| Employers’ secondary Class 1 rate above secondary threshold | 12.8% | 12.8% |
| Employers’ contracted-out rebate, salary-related schemes | 3.7% | 3.7% |
| Employers’ contracted-out rebate, money-purchase schemes | 1.4% | 1.4% |
| Class 2 rate | £2.40 | £2.40 |
| Class 2 small earnings exception (per year) 1 | £5,075 | £5,075 |
| Special Class 2 rate for share fishermen | £3.05 | £3.05 |
| Special Class 2 rate for volunteer development workers | £4.75 | £4.85 |
| Class 3 rate (per week) | £12.05 | £12.05 |
| Class 4 lower profits limit (per year) | £5,715 | £5,715 |
| Class 4 upper profits limit (per year) | £43,875 | £43,875 |
| Class 4 rate between lower profits limit and upper profits limit | 8% | 8% |
| Class 4 rate above upper profits limit | 1% | 1% |
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1 Those with profits less than, or expected to be less than, the level of the Small Earnings Exception may apply for exemption from paying Class 2 contributions. From April 2011 the proposed increase of 0.5% on both employee and employer National Insurance contributions has been increased to 1%. The threshold will rise correspondingly to eliminate the effect of the increase for those earning £20,000 or less per annum. |
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How to register your new PAYE scheme
This article and video gives easy to follow, step by step instructions on registering a new PAYE scheme with HMRC.
A new scheme can be registered either online at www.hmrc.gov.uk , by telephone ( 0845 60 70 143) or in writing.
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