Tax and NI

15. The 2007/08 Tax Year

The information in this briefing applies to the current tax year. The main changes from the previous year are outlined below.

15.1 Income tax (see 4). The three income tax bands and rates for the tax year to 5 April 2008 were:

15.2 Corporation tax bands (see 5). In 2007/08 they were:

15.3 Allowances (see 4).

• The personal allowance was £5,225.

15.4 National Insurance (see 10).

• Employees earning less than £100 a week were exempt. Other employees paid 11 per cent (9.4 per cent if contracted-out) on any extra, up to £670 a week.
• The employer's contribution was 12.8 per cent on earnings above £100 a week (less if contracted out).
• The self-employed paid Class 2 contributions of £2.20 a week.
• Class 4 contributions were charged at eight per cent on profits between £5,225 and £34,840.
• The earnings limit for exemption from Class 2 contributions was £4,635.

15.5 Capital gains tax (see 12).

• The annual individual exemption was £9,200.