Tax and NI

17. The 2007/08 Tax Year

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

17.1 The three income tax bands (see 3 and 4) and rates for the tax year to 5 April 2008 were:

17.2 Corporation tax (see 5) bands for the tax year ending 31 March 2008 were

17.3 The personal allowance was £5,225.

17.4 National Insurance (see 13).

• Employees earning less than £100 a week were exempted. 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 rate 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 £5,255 and £34,840.
• The earnings limit for exemption from Class 2 contributions was £4,635.

17.5 Capital gains tax (see 14).

• The annual exemption for individuals was £9,200.