Tax and NIC rates

Income tax allowance

Allowances £ 2014/15 2015/16 2016/17
Personal Allowances*      
those born after 5 April 1948 10,000 10,600 11,000
those born between 6 April 1938 and 5 April 1948 10,500 10,600 11,000
those born before 6 April 1938 10,660 10,660 11,000
Transferable tax allowance:      
for married couples and civil partners n/a 1,060 1,100
Married couple's allowance:      
for those born before 6 April 1935, maximum amount 8,165 8,355 8,355
for those born before 6 April 1935, minimum amount 3,140 3,220 3,220
Blind person's allowance 2,230 2,290 2,290
Income limit for personal allowance 100,000 100,000 100,000
Income limit for personal allowance for those born before 6 April 1938 (6 April 1948 in 2014/15 only)** 27,000 27,700 n/a
Dividend Allowance*** n/a n/a 5,000
Personal Savings Allowance****      
Basic Rate Taxpayers n/a n/a 1,000
Higher Rate Taxpayers n/a n/a 500



* In 2014/15 and 2015/16 an individual’s personal allowance depends on their date of birth and their income in the tax year. From 2016/17 onwards, all individuals are entitled to the same personal allowance, regardless of their date of birth; this is subject to the income limit of £100,000.

** The age-related personal allowance is reduced where the taxpayer's income in the tax year is above the income limit, by £1 for every £2 above the limit until the level of the basic personal allowance is reached. For 2015/16 a taxpayer born before 6 April 1938, who has taxable income between £27,820 and £100,000, is entitled to the basic personal allowance of £10,600. From 2016/17 onwards, all individuals are entitled to the same personal allowance, regardless of their date of birth. This is subject to the £100,000 income limit.

*** From 2016/17, any individual who receives dividend income is entitled to a Dividend Allowance of £5,000. This is a nil rate band of tax, which means an individual pays no income tax on their first £5,000 of dividend income. It does not reduce the amount of taxable income.

**** From 2016/17, basic rate and higher rate taxpayers (but not additional rate taxpayers) who receive savings income are entitled to a Personal Savings Allowance. This is a nil rate band of tax, which means that basic rate and higher rate taxpayers pay no income tax on £1,000 or £500 of savings income respectively. The Personal Savings Allowance does not reduce the amount of taxable income.

Income tax – taxable bands

2014/15 Band 2015/16 Band 2016/17 Band
Starting rate for savings
10%
Up to £2,880 Starting rate for savings
0%
Up to £5,000 Starting rate for savings
0%
Up to £5,000
Basic rate
20%
Up to £31,865 Basic rate
20%
Up to £31,785 Basic rate
20%
Up to
£32,000
Higher rate
40%
£31,866 to £150,000 Higher rate
40%
£31,786 to £150,000 igher rate
40%
£32,001 to £150,000
Additional rate
45%
Over £150,000 Additional rate
45%
Over £150,000 Additional rate
45%
Over £150,000


Dividends*

2014/15 Tax rate 2015/16 Tax rate 2016/17 Tax rate
Up to £31,865 10% Up to £31,785 10% Up to
£32,000
7.5%
£31,866 – £150,000 32.5% £31,786 – £150,000 32.5% £32,001 – £150,000 32.5%
Over £150,000 37.5% Over £150,000 37.5% Over £150,000 38.1%

 

* From April 2016 the dividend tax credit (10%) is abolished and replaced with a £5,000 tax-free Dividend Allowance. In addition, the dividend tax rates have changed.

National Insurance contributions (NIC)

Class 1 primary NIC (employee – EE)

£ per week (unless stated) 2014/15 2015/16 2016/17
Lower earnings limit 111 112 112
Primary theshold 153 155 155
Upper accrual point 770 770 n/a
Upper earnings limit 805 815 827
EE primary Class 1 rate between primary threshold and upper earnings limit 12% 12% 12%
EE primary Class 1 rate above upper earnings limit 2% 2% 2%
EE contracted-out rebate – salary 1.4% 1.4% n/a
Married women's reduced rate between primary threshold and upper earnings limit 5.85% 5.85% 5.85%
Married women's rate above upper earnings limit 2% 2% 2%



Class 1 secondary NIC (employers – ER)

£ per week (unless stated) 2014/15 2015/16 2016/17
Secondary threshold 153 156 156
ER secondary Class 1 rate above secondary threshold 13.8% 13.8% 13.8%
ER contracted-our rebate – salary related schemes 3.4% 3.4% n/A



Class 2 NIC (self-employed)

£ per week (unless stated) 2014/15 2015/16 2016/17
Class 2 rate 2.75 2.80 2.80
Class 2 small earnings exception/small profits (per year) 5,885 5,965 5,965
Special Class 2 rate for share fishermen 3.40 3.45 3.45
Special Class 2 rate for volunteer development workers 5.55 5.60 5.60



Class 3 NIC (voluntary)

£ per week 2014/15 2015/16 2016/17
Class 3 rate 13.90 14.10 14.10



Class 4 NIC (self-employed)

£ per year 2014/15 2015/16 2016/17
Class 4 lower profits limit 7,956 8,060 8,060
Class 4 upper profits limit 41,865 42,385 43,000
Class 4 rate between lower profits limit and upper profits limit 9% 9% 9%
Class 4 rate above upper profits limit 2% 2% 2%


Capital gains tax

  2014/15 2015/16 2016/17
Standard rate 18% 18% 10%/18%*
Rate for higher and additional taxpayers 28% 285 18%/28%*
Annual exemption 11,000 £11,100 £11,100
Entrepreneurs' Relief rate 10% 10% 10%
Entrepreneurs' Relief lifetime limit 10M 10M £10m

 

* CGT rates of 10% and 18% introduced in Finance Bill 2016 for disposals on or after 6 April 2016 do not apply to transactions involving residential property or carried interest.  CGT rates for these transactions remain at 18% and 28%.

Inheritance tax

  2014/15 2015/16 2016/17
Chargeable lifetime transfers (after exemptions):      
Up to £325,000 0% 0% 0%
Over £325,000 20% 20% 20%
On death (net estate):      
Up to £325,000 0% 0% 0%
Over £325,000 40% 40% 40%


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