Income tax

Tax bands and rates		2012/13	2011/12
Basic rate band		£34,370	£35,000
Basic tax rate		20%	20%
Dividend ordinary tax rate		10%	10%
Savings rate band		£2,710	£2,560
Savings rate		10%	10%
Higher rate band		£34,371 - £150,000	£35,001 - £150,000
Higher tax rate		40%	40%
Dividend higher tax rate		32.5%	32.5%
Additional rate band		Over £150,000	Over £150,000
Additional tax rate		50%	50%
Dividend additional tax rate		42.5%	42.5%
Allowances that reduce taxable income
Personal allowances	under 65	£8,105	£7,475
	65 to 74	£10,500	£9,940
	75 and over	£10,660	£10,090
Blind person's allowance		£2,100	£1,980
Age related allowances are reduced by £1 for each £2 of income above £25,400 (2011/12 £24,000), until the minimum of £8,105 (2011/12 £7,475) is reached. The minimum personal allowance is reduced, by £1 for each £2 of income from £100,000 (2011/12 - £100,000) to £116,210 (2011/12 - £114,950).
Allowances that reduce tax
Married couple's allowance (MCA)	78 and over (77 and over in 2011/12)	£7,705	£7,295
Tax reduction at 10%		£770.50	£729.50
The age for MCA is of the elder spouse or civil partner. The loss of tax reduction is 10p for each £2 of income above £25,400 (2011/12 £24,000) until the minimum of £296 (2011/12 £280) is reached. All ages as at 5 April 2013 (5 April for 2011/12).
Non domicile charge
Charge for adult non UK domiciliary - applies after UK residence in seven or more of the previous tax years		£50,000	£30,000
Tax shelters
Enterprise Investment Scheme (EIS) up to		£1,000,000	£500,000
Maximum amount for EIS carry back		£50,000	£50,000
Income tax relief		30%	30%
Venture Capital Trust (VCT) up to		£200,000	£200,000
Golden handshake max.		£30,000	£30,000
Rent a room - exempt on gross annual rent up to		£4,250	£4,250
Construction industry scheme - deduction rate
Standard rate - registered		20%	20%
Higher rate - not registered		30%	30%

Did you know?

That the Treasury is expecting to raise £154.8 billion from income tax (2011/12 - £152.6 billion).

2013 and beyond

From 2013/14 the age related allowance will be restricted. The allowance of £10,500 for 2012/13 will be restricted to those born after 5 April 1938 but before 6 April 1948. Similarly the £10,660 allowance for 2012/13 will be restricted to those born before 6 April 1938.

Easy Accountancy

Easy Accountancy is the UK’s only national specialist accountancy firm for freelancers, sole traders and small businesses

If you’ve just started out as a freelancer or run a small business, you’ll definitely need a small accountant and there are plenty of options out there! However, most accountants will charge you every time you get in touch with them; for every phone call, email or meeting.

We don’t want our clients to be scared to contact us and potentially lose out on valuable tax saving advice. It's even more important when you first start out as you really need to set your business up in the best way possible. As a start up you’ll probably have loads of questions and will really appreciate the fact you can call your accountant as many times as you like without the fear of racking up large bills.

Our low cost, all-inclusive fixed-fee accountancy service includes unlimited access to your own accountant throughout the year, so you never need to worry about picking up the phone and then receiving a bill afterwards for the privilege, and covers all your business and personal tax affairs needs. All clients additionally receive:

Help to run your business in the most tax efficient way possible
Help so you can understand the taxes you need to pay
Advice on the best ways to manage your business
Updates and reminders so you'll never miss a deadline
Help to ensure you maximise your tax allowances
Provide proactive tax advice throughout the year

We’ve saved our clients up to half on their accountancy bills – if you’d like a quote, click on the quote me button to the right of this page. Alternatively, call us on 0500 234111 / 01442 275767 or email jessica@easyaccountancy.co.uk

We also have a money-back service guarantee - all of your telephone calls and emails will be answered on the same day, or we will refund your monthly fee (another first within the accountancy world).

To appoint us as your accountants, please fill in our Client Agreement Form online.

If you are a contractor working through a limited company then visit SJD Accountancy (our sister company) who specialise in providing tax advice and accountancy services for Limited Company contractors. You can also keep up to date by following the SJD Accountancy Twitter

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