At Home : Income Tax

Chappell Associates advise on all aspects of personal taxation and help deal quickly and effectively with the Inland Revenue.

Income tax is levied on an individual to cover all sources of income arising in the tax year.

Certain personal allowances are granted based on your individual circumstances. If a new source of income arises, this may increase your tax bill by putting total taxable income into a higher tax band.

If you are an employee, your income tax is automatically deducted via the PAYE system. If you are self-employed then you are responsible for assessing and paying your own tax.

Income Tax Allowances	2005-06(£)	2006-07(£)
Personal Allowance	4,895	5,035
Personal allowance (People Aged 65-74)	7,090	7,280
Personal allowance (People Aged 75+)	7,220	7,420
Income limit for age related allowances	19,500	20,100
Married Couples Allowance for people born before 6 April 1935	5,905	6,065
Married Couples Allowance (People aged 75+)	5,975	6,135
Blind Persons Allowance	1,610	1,660
'Rent a Room' Limit	4,250	4,250

The rate of relief for the continuing married couple's allowance and maintenance relief for people born before 6 April 1935 is 10%.

Taxable Bands	2005-06(£)	2006-07(£)
Starting Rate 10%	0-2,090	0-2,150
Basic Rate 22%	2,091-30,310	2,150-31,150
Higher Rate 40%	Over 32,400	Over 33,300

	2005-06	2006-07(£)
Trusts	40%	40%