Website of the UK government

Please note that this website has a UK government accesskeys system.

Public services all in one place

Main menu

Sunday, 22 November 2009

Page menu

Browse by subject

Browse by people

Newsroom

Income Tax, National Insurance and Tax Credit rates for 2008-2009

Published: Thursday, 18 October 2007

The government today published the 2008-2009 rates and allowances for Income Tax, National Insurance Contributions, Working and Child Tax Credits, Child Benefit/Guardian's Allowance and State Pension and Pension Credit.

Update: 25 November 2008

Income Tax rates for 2009-2010 and beyond were announced by the Chancellor at the Pre-Budget Report on Monday 24 November 2008.

Income Tax and National Insurance rates for 2009-10

Income Tax personal allowances

All income tax allowances will increase in line with inflation. The personal allowance will increase to £5,435. The age-related personal allowances will rise to £9,030 for people aged between 65 and 74 and to £9,180 for those aged 75 and over.

£ per year (unless stated)	2007-08	Change	2008-09
Personal allowance (age under 65)	£5,225	+£210	£5,435
Personal allowance (age 65-74)	£7,550	+£1,480	£9,030
Personal allowance (age 75 and over)	£7,690	+£1,490	£9,180
Married couple's allowance (aged less than 75 and born before 6th April 1935)	£6,285	+£250	£6,535
Married couple's allowance (age 75 and over)	£6,365	+£260	£6,625
Married couple's allowance - minimum amount	£2,440	+£100	£2,540
Income limit for age-related allowances	£20,900	+£900	£21,800
Blind person’s allowance	£1,730	+£70	£1,800

National Insurance contributions

The starting point for employers’, employees’ and self-employed NICs in 2008-09 will increase in line with inflation to £105 per week. NICs are not paid on earnings or profits below this amount. The upper earnings and profits limits for NICs will increase from April 2008 from £670 to £770 per week. For the self-employed, the rate of Class 2 contributions will increase to £2.30 per week.

£ per week (unless stated)	2007-08	Change	2008-09
Lower earnings limit, primary Class 1	£87	+£3	£90
Upper earnings limit, primary Class 1	£670	+£100	£770
Primary threshold	£100	+£5	£105
Secondary threshold	£100	+£5	£105
Class 2 rate (per week)	£2.20	+£0.10	£2.30
Class 2 small earnings exception	£4,635 per year	+£190	£4,825 per year
Special Class 2 rate for share fishermen (per week)	£2.85	+£0.10	£2.95
Special Class 2 rate for volunteer development workers	£4.35	+£0.15	£4.50
Class 3 rate (per week)	£7.80	+£0.30	£8.10
Class 4 lower profits limit	+£5,225 per year	+£210	£5,435
Class 4 upper profits limit	£34,840 per year	+£5,200	£40,040 per year

Working and Child Tax Credits rates 2008-2009

Amount is per year unless stated.

Type of allowance	2007-08	Change	2008-09
Basic element	£1,730	+£70	£1,800
Couple and lone parent element	£1,700	+£70	£1,770
30 hour element	£705	+£30	£735
Disabled worker element	£2,310	+£95	£2,405
Severe disability element	£980	+£40	£1,020
50+ Return to work payment (16-29 hours)	£1,185	+£50	£1,235
50+ Return to work payment (30+ hours)	£1,770	+£70	£1,840

Childcare element of the Working Tax Credit

Type of allowance	2007-08	Change	2008-09
Maximum eligible cost for one child	£175 per week	-	£175 per week
Maximum eligible cost for two or more children	£300 per week	-	£300 per week
Percentage of eligible costs covered	80%	-	80%

Child tax credit

Amount is per year unless stated.

Type of allowance	2007-08	Change	2008-09
Family element	£545	-	£545
Family element, baby addition	£545	-	£545
Child element	£1,845	+£240	£2,085
Disabled child element	£2,440	+£100	£2,540
Severely disabled child element	£980	+£40	£1,020

Child Benefit/Guardian's Allowance rates 2008-2009

Amount is per week unless stated.

Type of allowance	2007-08	Change	2008-09
Eldest/only child	£18.10	+£.70	£18.80
Other children	£12.10	+£0.45	£12.55
Guardian's Allowance	£12.95	+£0.50	£13.45