Yorkshire Accountancy

Key Dates and Deadlines

Income Tax (including Class 4 NIC)
31 July 2004 2003/04 second payment on account
31 January 2005 2003/04 balancing payment, and
2004/05 first payment on account
31 July 2005 2004/05 second payment on account
31 January 2006 2004/05 balancing payment, and
2005/06 first payment on account

Capital Gains Tax
31 January 2005 2003/04 Capital Gains Tax
31 January 2006 2004/05 Capital Gains Tax


	Rates and Dates Income Tax Capital Gains Tax Corporation Tax Inheritance Tax VAT Vehicle & Mileage National Insurance Capital Allowances

Corporation Tax
9 months and one day after the end of the accounting period

Inheritance Tax
6 months after the end of the month of death or chargeable transfer.
For chargeable lifetime transfers between 6 April and 30 September, due date is 30 April in the following year.

Latest Filing/Issuing Deadlines -2003/04 PAYE Returns
19 May 2004 P14, P35, P38, and P38A and CIS36
31 May 2004 Issue P60s to employees
6 July 2004 P9D, P11D and P11Db - also issue copies to employees

Some Useful Rates

	Weekly Benefit
Basic Retirement Pension	2004/05	2003/04
Single person	£79.60	£77.45
Married couple	£127.25	£123.80
Child Benefit	£16.50	£16.05
First eligible child
Each subsequent child	£11.05	£10.75
Statutory Sick Pay (SSP)
Average weekly earnings £79 or over (2003/04 £77)	£66.15	£64.35
Statutory Maternity Pay (SMP)
90% of average weekly pay	First 6 weeks
Maximum £102.80. Minimum 90% average weekly pay	Next 20 weeks
Minimum rate	£71.10	£69.30
Adoption Pay (SAP)	26 weeks
Paternity Pay (SPP)	1 week or fortnight
Both SAP and SPP
90% of average weekly pay	Max £102.80	Max £100.00
	Min £71.10	Min £69.30
Example rates:
Jobseekers Allowance
Single person	£55.65	£54.65
Married couple	£87.30	£85.75
National Minimum Wage
From 1 October 2003		£4.50 p.h.
From 1 October 2004		£4.85 p.h.

Tax rates


	Note	2004/05	2003/04
Starting rate band to		£2,020	£1,960
Tax rate		10%	10%
Basic rate band- next		£29,380	£28,540
Non-savings rate		22%	22%
Savings rate		20%	20%
UK dividend rate		10%	10%
Higher rate - taxable income over		£31,400	£30,500
Higher tax rate		40%	40%
UK dividend rate		32.50%	32.50%
Trusts
Tax rate		40%	34%
UK dividend rate		32.50%	25%
Allowances that reduce taxable income
Personal allowance (PA) under 65	1	£4,745	£4,615
65 to 74	1,3	£6,830	£6,610
75 and over	1,3	£6,950	£6,720
Blind person's allowance		£1,560	£1,510
Allowances that reduce tax
Married couple's allowance (MCA)
Tax reduction 70 to 74	1,2,3	£572.50	£556.50
75 and over	1,2,3	£579.50	£563.50
		£18,900	£18,300
The age-related allowances are progressively withdrawn if income exceeds
Minimum PA		£4,745	£4,615
Minimum MCA tax reduction		£221	£215
Tax Shelters	4
Enterprise Investment Scheme (EIS) up to	5	£200,000	£150,000
Venture Capital Trust (VCT) up to		£200,000	£100,000
Golden Handshake max.		£30,000	£30,000
Rent a Room - exempt on gross annual rent up to		£4,250	£4,250
Notes

1. Ages are as the end of the tax year. Ages for the MCA relate to the elder of husband or wife.
2. MCA is available only to those couples where at least one spouse was born before 6 April 1935.
3. The higher rates of personal allowances are reduced by £1 for each £2 of excess income over £18,900 (2003/04 £18,300) until the basic allowance is reached. Similar limits apply to the married couple's allowance: the loss of tax reduction is 10p for each £2 of excess income (only the husband's income is taken into account) until the minimum of £221 (2003/04 £215) is reached.
4. Subscription for new ordinary shares - 20% income tax relief. Also such investments by subscription are eligible for deferral of capital gains tax on unlimited gains re-invested.
5. Subscriptions for new ordinary shares - 20% income tax relief. For 2004/05 and 2005/06, additional income tax relief of 20% will be paid direct to the VCT.

Capital gains tax rates and bands are as follows:

	2004/05	2003/04
Taxed as top slice of savings income
Annual exemption
- individual	£8,200	£7,900
- settlements (spread over total number)	£4,100	£3,950
Transfers between husband and wife living together are exempt
Chattels exemption
(proceeds per item or set)	£6,000	£6,000
Taper Relief
For gains realised after 5 April 1998 by individuals or trustees, indexation allowance is frozen and the gain reduced by a tapering relief. The value of the taper relief depends on whether or not the asset is a business asset, and on the number of complete years the asset has been held after 5 April 1998 (with an additional "bonus" year for non-business assets held on 16 March 1998).
Non-Business Assets	% gain chargeable
No. of complete years
held after 5 April 1998
1	100
2	100
3	95
4	90
5	85
6	80
7	75
8	70
9	65
10 or more	60

Business Assets
No of complete years	Disposals After 5 April 2002
held after 5 April 1998	% of gain chargeable
0	100
1	50
2 or more	25
Notes
1. Transfers between husband and wife living together are exempt. 2. Capital gains are regarded as the top slice of savings income. Rates of 10%, 20% and 40% will therefore apply to gains taxed on individuals, as appropriate. Gains taxed on trustees are usually taxed at the special trust rate of 40% (2003/04 34%).

Corporation tax rates and bands are as follows:

Financial Year Commencing	1 April 2004	1 April 2003
Taxable profits
First £10,000	0%	0%
Next £40,000	23.75%	23.75%
Next £250,000	19%	19%
Next £1,200,000	32.75%	32.75%
On profits over £1,500,000	30%	30%
From 1 April 2004, a minimum tax rate of 19% is charged when profits are distributed to individual shareholders by a company or group. Lower tax rates will continue to apply where profits are retained or distributed to other companies.

Transfers on or Within Seven Years Before Death

	2004/05	2003/04
Nil rate band to	£263,000	£255,000
Rate of tax on balance	40%	40%
Chargeable lifetime transfers	20%	20%
All lifetime transfers not covered by exemptions and made within seven years of death will be added back into the estate for the purpose of calculating the tax payable. This may then be reduced by taper relief.
Charge on Gifts Within 7 Years of Death
Years before death	0-3 3-4 4-5	5-6 6-7
Tax reduced by	0% 20% 40%	60% 80%
Main Relief’s
Business property:
- business or interest therein	100%
- qualifying shareholders in unquoted* companies	100%
- land, buildings, machinery, or plant used by transferor's controlled company or partnership	50%
Agricultural property	50% or 100%
*Unquoted companies include those listed on AIM
Main Exemptions
1. Transfers to UK domiciled spouse - exempt. 2. Transfers to non UK domiciled spouse - £55,000. 3. Annual exemption - per donor - £3,000. 4. Small gifts per donee - £250 p.a. 5. Gifts in consideration of marriage to bride and/or groom of: up to £5,000 by a parent, up to £2,500 by a grandparent, or up to £1,000 by any other person. 6. Normal gifts out of income - no limit. 7. Gifts to charities - exempt

VAT

	1 April 2004	1 April 2003
Standard rate	17.5%	17.5%
VAT fraction	7/47	7/47
Taxable Turnover Limits
Registration - last 12 months or next 30 days over	£58,000	£56,000
Deregistration - next 12 months under	£56,000	£54,000
Cash accounting scheme - up to	£660,000	£600,000
Optional flat rate scheme - up to	£150,000	£150,000
Annual accounting scheme - up to	£660,000	£600,000
Quarterly Return – Scale figure for private use of fuel	From 1 May 2004
Petrol	scale charge	VAT due per car
Up to 1400cc	£232	£34.55
1401cc - 2000cc	£293	£43.63
Over 2000cc	£432	£64.34
Diesel
Up to 2000cc	£216	£32.17
Over 2000cc	£273	£40.65

Car Benefit

The tax you pay on your company car is governed by four factors:

1. The list price of the car, on the day before it was first registered, plus certain accessories,
2. The rate at which the car emits carbon dioxide (CO2),
3. The fuel type
4. Your highest rate of income tax.

You can find your taxable percentage for 2004/05 using the following table:

CO2	Taxable %		CO2	Taxable %		CO2	Taxable %
in g/km	Petrol		in g/km	Petrol	Diesel	in g/km	Petrol	Diesel
Less than 150	15%	18%	180 to 184	22%	25%	215 to 219	29%	32%
150 to 154	16%	19%	185 to 189	23%	26%	220 to 224	30%	33%
155 to 159	17%	20%	190 to 194	24%	27%	225 to 229	31%	34%
160 to 164	18%	21%	195 to 199	25%	28%	230 to 234	32%	35%
165 to 169	19%	22%	200 to 204	26%	29%	235 to 239	33%	35%
170 to 174	20%	23%	205 to 209	27%	30%	240 to 244	34%	35%
175 to 179	21%	24%	210 to 214	28%	31%	245 and over	35%	35%

Reliable emissions data is not widely available for cars registered before 1 January 1998. For them, the following taxable percentages apply, regardless of fuel type:

Engine capacity

Taxable %

Up to 1400cc

15%

1401 - 2000cc

22%

Over 2000cc

32%

Van Benefit

Benefit per vehicle: -

Van under 4 years old

£500

Van over 4 years old

£350

Car fuel benefits

If the employee pays for the full cost of all fuel for private journeys (usually including home to work) there will be no car fuel benefit. In all other cases the full tax charge will be due.

The taxable car fuel benefit is, for 2004/05, calculated by multiplying £14,400 by the same percentage as applies (or would apply) for the car benefit.

Example: A company car driver has a car which, on the day before it was first registered, had a list price of £18,000. It runs on petrol, and emits 182 g/km of CO2.

If we assume the driver pays tax at 40%, the annual tax bill on the car is: £18,000 x 22% x 40% = £1,584

If the employer provides any fuel used for private journeys and is not re-imbursed for the cost, the 2004/05 tax bill for the fuel is: £14,400 x 22% x 40% = £1,267.20.

Mileage Allowances

For Employees Using Their Own Transport

The approved maximum tax and national insurance free mileage allowances for employees using their own transport for business are as follows:

Flat Rate

< 10,000

> 10,000

Car

40p

25p

Motorcycle 24p 24p

Bicycle 20p 20p

Income Tax and NICs are due when allowances exceed these rates. Employees can claim tax relief on any shortfall.
Rates of up to 5p per mile, per passenger, are also tax and NIC free when paid for the carriage of fellow employees on the same business trip.

Fuel-Only Mileage Rates

Inland Revenue advisory mileage rates for employee private mileage reimbursement or employer reimbursement of business mileage are:

Petrol Diesel

LPG

Up to 1400cc

10p 9p

1401cc - 2000cc

12p 9p

Over 2000cc

14p 12p

Income tax and NICs may be due on higher rates and tax relief may be due on lower rates.

National Insurance

Class 1 (not contracted out)	Employer	Employee
£91.01 - £610	12.8%	11%
Over £610	12.8%	1%
Men 65 and over and women 60 and over	as above	Nil
Class 1A (on relevant benefits)	12.8%	Nil
Class 1B (on PAYE settlement arrangement)	12.8%
Class 2 (Self employed)	£2.05 per week
Limit of net earnings for exception	£4,215 per annum
Class 3 (Voluntary)	£7.15 per week
Class 4 (* Self employed on profits)
£4,745 to £31,720	8%
Excess over £31,720	1%
*Exemption applies if state retirement age was reached by 6 April 2004.
Note For those earning between £79 per week and £610 per week, employers receive a rebate of 1.0% on contracted out money purchase schemes or 3.5% on contracted out final salary schemes, and employees, a rebate of 1.6% for either scheme.

Motor Cars

On reducing balance (max. £3,000 p.a. per car)	25%
Plant and machinery
Small firms:
Allowance for the first year	50%
Writing down allowance on reducing balance	25%
Medium firms:
Allowance for the first year	40%
Writing down allowance on reducing balance	25%
Large firms:
Writing down allowance only on reducing balance	25%
Long Life Assets
Allowance for first year	6%
Writing down allowance for subsequent years on reducing balance	6%
Energy Saving Technology
All firms	100%
Electric and Low Emission Cars
Registered on or after 17 April 2002	100%
Buildings
Industrial buildings and qualifying hotels	4% of building cost p.a.
Commercial/Industrial buildings in an enterprise zone	100% of building cost
Agricultural buildings	4% of building cost p.a.
Research and Development	100%
Notes 1. Capital allowances allow the cost of capital assets to be written off against taxable profits. They replace the charge for depreciation in the business accounts, which is not allowable for tax relief. 2. A small firm is defined as a business that satisfies any two of the following conditions: (a) turnover £5,600,000 or less (b) assets £2,800,000 or less (c) not more than 50 employees. 3. A medium firm is defined as a business that satisfies any two of the following conditions: (a) turnover £22,800,000 or less (b) assets £11,400,000 or less (c) not more than 250 employees.