Website of the UK government

Income Tax and National Insurance

Income Tax and National Insurance rates and thresholds for 2009-10 were announced in the November 2008 Pre-Budget Report. They include a Personal Allowance of:

• £6,475 for people aged under 65
• £9,490 for people aged between 65-74
• £9,640 for those aged 75 and over

The basic rate of tax remains 20 per cent and the higher 40 per cent rate remains too.

Budget 2009 announced that from April 2010 a new rate of Income Tax of 50 per cent will apply to income over £150,000. This means that income tax will not rise for anyone earning under £100,000.  This additional 50 per cent rate will yield £2.4 billion in 2011-12.

Income Tax Personal Allowances will be reduced at a rate of £1 for every £2 over £100,000, tapering down to zero.  The yield in 2012-13 from this change will be £1.5 billion.

These changes are to replace the 45 per cent Income Tax rate and the two-stage taper of the personal allowance announced in the Pre-Budget Report.

• Income Tax and National Insurance rates for 2009-10

Tax avoidance measures

Budget 2009 announced measures to protect the tax system from abuse, ensuring individuals pay their fair share. This includes HM Revenue & Customs (HMRC) publishing the names of serious tax defaulters - individual taxpayers who have deliberately understated £25,000 or more of tax.

These measures will raise over £1 billion during the period 2009-10 to 2011-12.  £3 billion of tax receipts a year will be protected from tax evasion and avoidance by 2010-11.