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CLAUSE 50: CHARGE AND
RATES OF INCOME TAX FOR 2001-02
SUMMARY
1. This
clause imposes the income tax charge for 2001-02, and sets the starting,
basic, and higher rates of tax at 10 per cent, 22 per cent, and 40
per cent, respectively.
BACKGROUND NOTE
2. Clause
50 sets the rates of income tax for 2001-02. The Starting rate of
income tax is set at 10 per cent, the basic rate of income tax at
22 per cent and the higher rate of income tax at 40 per cent.
3.
The starting rate of tax was introduced in 1999-2000. Clause 51 extends
the starting rate limit so that in 2001-02, it applies to the first
£1,880 of an individual’s taxable income (other than dividends).
4. The
rate of tax on savings income over the starting rate limit but below
the basic rate limit remains at the lower rate of 20 per cent. Dividends
are taxed at 10 per cent up to the basic rate limit and at 32.5 per
cent above that limit.
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