Contractor Rates and allowances - 2010-2011

Contractor Income Tax allowances - 2010-11
Personal Allowance (1) - £6,475
Income limit for Personal Allowance - £100,000

(1) The Personal Allowance reduces where the income is above £100, 000 - by £1 for every £2 of income above the £100,000 limit. This reduction applies irrespective of age.

Contractor Income Tax rates and taxable bands - 2010-11

Basic rate: 20% - £0-£37,400
Higher rate: 40% - £37,401-£150,000
Additional rate: 50% - Over £150,000

Contractor Dividend Tax rates and taxable bands - 2010-11
Basic rate: 10% - £0-£37,400
Higher rate: 32.5% - £37,401-£150,000
Additional rate: 42.5% - Over £150,000

All dividends received benefit from an automatic 10% tax credit

Contractor National Insurance contributions - 2010-11

Class 1 - Employees
Lower earnings limit, Class 1 - £97 per week
Upper earnings limit, Class 1 - £844 per week
Upper accruals point - £770 per week
Primary threshold - £110 per week
Secondary threshold - £110 per week
Employees’ Class 1 rate from primary threshold to upper earnings limit - 11%
Employees’ Class 1 rate above upper earnings limit - 1%
Class 1A rate on employer provided benefits - 12.8%
Employers’ Class 1 rate above secondary threshold - 12.8%

Class 2 - Self Employed
Class 2 rate - £2.40
Class 2 small earnings exception - £5,075 per year

Class 4 - Self Employed
Class 4 lower profits limit - £5, 715 per year
Class 4 upper profits limit - £ - 43, 875 per year
Class 4 rate between lower profits limit and upper profits limit - 8%
Class 4 rate above upper profits limit - 1%

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