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HM REVENUE & CUSTOMS15

Bands of taxable income and corresponding tax rates for 2016/17 (Version from 26 May 2016)

 

2016-17

2015-16

 

 

% of income/£ per year

Basic rate

20%

20%

Higher rate

40%

40%

Additional rate

45%

45%

Starting rate for savings income 1

0%

0%

Dividend ordinary rate – for dividends otherwise taxable at the basic rate (effective rate with tax credit)2

7.5%

10% (0%)

Dividend upper rate – for dividends otherwise taxable at the higher rate (effective rate with tax credit) 2

32.5%

32.5% (25%)

Dividend additional rate – for dividends otherwise taxable at the additional rate (effective rate with tax credit) 2

38.1%

37.5% (30.6%)

Starting rate limit (savings income)1

£5,000

£5,000

Basic rate band

£0-32,000

£0-31,785

Higher rate band

£32,001-150,000

£31,786-£150,000

Additional rate band

Over £150,000

Over £150,000

 

 

 

 

 

 

 

Income tax allowances for 2016/17

 

 

2016-17

2015/16

 

 

 

Personal allowance:

 

 

Personal Allowance10

£11,000

£10,600

Income limit for personal allowance10

£100,000

£100,000

Income limit for married couple’s allowance11

£27,700

£27,700

Marriage allowance:

 

 

Marriage allowance12 13

£1,100

£1,060

Married couple’s allowance for those born before 6 April 1935:

 

 

Maximum amount of married couple’s allowance14 15 16

£8,355

£8,355

Minimum amount of married couple’s allowance14 15 16 17

£3,220

£3,220

Blind person’s allowance:

 

 

Blind person’s allowance16

£2,290

£2,290

Dividend allowance:

 

 

Dividend allowance18

£5,000

N/a

Personal savings allowance:

 

 

Personal savings allowance for basic rate taxpayers19

£1,000

N/a

Personal savings allowance for higher rate taxpayers19

£500

N/a

 

 

 

 

 

 

 

National Insurance contribution thresholds

 

2016-17

2015-16

 

£ per week

£ per week

Weekly Lower Earnings Limit (LEL)20

£112

£112

Weekly Primary Threshold (PT)20

£155

£155

Weekly Secondary Threshold (ST)21

£156

£156

Upper Earnings Limit (UEL)

£827

£815

Upper Profits Limit (UPL)

£43,000 per year

£42,385 per year

Upper Secondary Threshold for U21’s

£827

£815

Small Profits Threshold (SPT)20 22

£5,965 per year

£5,965 per year

Lower Profits Limit (LPL)

£8,060 per year

£8,060 per year

Employment Allowance

£3,000 (per year, per employer)

£2,000 (per year, per employer)

Apprentice Upper Secondary Threshold (AUST) for under 25s23

£827

-

 

 

 

 

 

 

 

 

Class 1 National Insurance contribution rates 2016-17

Employee (Primary)

 

Earnings (£ a week)24

NIC rate (%)

Below £112 (LEL)

0

£112-155 (PT)25

0

£155-827 (UEL)

12

Above £827

2

 

Employer (Secondary)

 

Earnings (£ a week)24

NIC rate (%)

Below £156 (ST)

0

Above £156 (ST)

13.8

 

Self-employed National Insurance contribution rates 2016-17

Annual Profits (£ a year)26

Class 2 (£ a week)27

Class 4 (%)

Below £5,965 (SPT)28

0.00

0

£5,965 to £8,060 (LPL)

£2.80

0

£8,060 to £43,000 (UPL)

£2.80

9

Above £43,000

£2.80

2

Other NICs rates

 

2016-17

2015-16

Married Women’s reduced rate (%)29

5.85%

5.85%

Special Class 2 rate for share fishermen30

£3.45 per week

£3.45 per week

Special Class 2 rate for volunteer development workers30

£5.60 per week

£5.60 per week

Class 3 rate30 31

£14.10 per week

£14.10 per week

Working and Child Tax Credit rates and thresholds

 

Working Tax Credit

 

2016-17

2015-16

 

£ a year

£ a year

Basic element

£1,960

£1,960

Couple and lone parent element

£2,010

£2,010

30 hour element

£810

£810

Disabled worker element

£2,970

£2,970

Severe disability element

£1,275

£1,275

Childcare element

 

 

maximum eligible cost for one child

£175 per week

£175 per week

maximum eligible cost for two or more children

£300 per week

£300 per week

% of eligible costs covered (%)

70%

70%

 

Child Tax Credit

 

2016-17

2015-16

 

£ a year

£ a year

Family element

£545

£545

Child element

£2,780

£2,780

Disabled child element

£3,140

£3,140

Severely disabled child element

£1,275

£1,275

 

 

 

 Income thresholds and withdrawal rates

 

2016-17

2015-16

 

£ a year

£ a year

Income threshold

£6,420

£6,420

Withdrawal rate (%)

41

41

First threshold for those entitled to Child Tax Credit only

£16,105

£16,105

Income rise disregard

£2,500

£5,000

Income fall disregard

£2,500

£2,500

 

Child Benefit and Guardian’s Allowance

 

2016-17

2015-16

 

£ a year

£ a year

Child Benefit

 

 

First Child

20.70

20.70

Second and subsequent children

13.70

13.70

Guardian’s Allowance

16.55

16.55

 

Tax-free Savings Account

 

2016-17

2015-16

 

£ a year

£ a year

Individual Savings Account (ISA) subscription limit

£15,240

£15,240

Junior ISA subscription limit

£4,080

£4,080

Child Trust Fund (CTF) subscription limit

£4,080

£4,080

 

 

Fuel benefit charge

 

2016-17

2015-16

Car fuel benefit charge multiplier

22,200

22,100

Van fuel benefit charge

598

594

 

Van benefit charge

 

2016-17

2015-16

Van benefit charge

3,170

3,150

 

 

 

NOTES

 

 

 

1.       From 2008-09 there is a starting rate for savings income only. If an individual’s taxable non-savings income exceeds the starting rate limit, then the starting rate for savings will not be available for savings income.  2

2.       From April 2016 the dividend tax credit will be abolished and replaced with a new £5,000 tax-free Dividend Allowance.  2 3

3.       This allowance is subject to the £100,000 income limit which applies regardless of the individual’s date of birth. The individual’s personal allowance is reduced where their income is above this limit. The allowance is reduced by £1 for every £2 above the limit.  2 3

4.       This allowance is subject to the £27,700 income limit. The individual’s personal allowance is reduced where their income is above this limit. The allowance is reduced by £1 for every £2 above the limit but is not reduced below £10,600 (unless the £100,000 income limit applies – see note 3).  2

5.       This transferable allowance is available to married couples and civil partners who are not in receipt of married couple’s allowance. A spouse or civil partner who is not liable to income tax; or not liable at the higher or additional rate, can transfer this amount of their personal allowance to their spouse or civil partner. The recipient must not be liable to income tax at the higher or additional rate. 

6.       The relief for this allowance is given at 20%. 

7.       This allowance is subject to the £27,700 income limit. The individual’s married couple’s allowance is reduced by £1 for every £2 above the limit. That reduction only applies after any reduction to their personal allowance (see note 2). The individual’s married couple’s allowance is never reduced below the minimum amount.  2

8.       The relief for this allowance is given at 10%.  2

9.       This is the maximum relief for maintenance payments where at least one of the parties was born before 6 April 1935. 

10.   From 2016-17 onwards, all individuals will be entitled to the same personal allowance, regardless of the individuals’ date of birth. This allowance is subject to the £100,000 income limit which applies regardless of the individual’s date of birth. The individual’s personal allowance is reduced where their income is above this limit. The allowance is reduced by £1 for every £2 above the limit.  2

11.   This allowance is subject to the £27,700 income limit. The individual’s personal allowance is reduced where their income is above this limit. The allowance is reduced by £1 for every £2 above the limit but is not reduced below £10,600 (unless the £100,000 income limit applies – see note 10). 

12.   This transferable allowance is available to married couples and civil partners who are not in receipt of married couple’s allowance. A spouse or civil partner who is not liable to income tax; or not liable at the higher or additional rate, can transfer this amount of their personal allowance to their spouse or civil partner. The recipient must not be liable to income tax at the higher or additional rate. 

13.   The relief for this allowance is given at 20%. 

14.   This allowance is subject to the £27,700 income limit. The individual’s married couple’s allowance is reduced by £1 for every £2 above the limit. That reduction only applies after any reduction to their personal allowance (see note 11). The individual’s married couple’s allowance is never reduced below the minimum amount.  2

15.   The relief for this allowance is given at 10%.  2

16.   These amounts are subject to indexation – the annual increase in CPI – and have been frozen for 2016-17 at 2015-16 levels in order to prevent any cash loss to individuals as a result of negative growth in CPI.  2 3

17.   This is the maximum relief for maintenance payments where at least one of the parties was born before 6 April 1935. 

18.   From April 2016, the new Dividend Allowance means that individuals will not have to pay tax on the first £5,000 of dividend income they receive. 

19.   From April 2016, the new Personal Savings Allowance means that basic rate taxpayers will not have to pay tax on the first £1,000 of savings income they receive and higher rate taxpayers will not have tax to pay on their first £500 of savings income.  2

20.   These thresholds are uprated by CPI.  2 3

21.   The Weekly Secondary Threshold is uprated by CPI. 

22.   The Small Profits Threshold replaced the Small Earnings Exception on 6 April 2015. 

23.   The Upper Secondary Threshold for Apprentices under 25 comes into effect on 6 April 2016. 

24.   The limits are defined as LEL - lower earnings limit; PT - primary threshold; ST - secondary threshold; and UEL – upper earnings limit.  2

25.   No National Insurance contributions (NICs) are actually payable but a notional Class 1 NIC is deemed to have been paid in respect of earnings between LEL and PT to protect contributory benefit entitlement. 

26.   The limits are defined as SPT – small profits threshold; LPL – lower profits limit and UPL – upper profits limit. 

27.   Class 2 NICs are paid at a weekly flat rate of £2.80 by all self-employed persons unless they have profits below the small profits threshold. The rate is uprated by CPI.

28.   The self-employed may pay Class 2 contributions if their profits are below the SPT. 

29.   Married Women’s Reduced Rate is paid only by married women and certain widows with valid reduced rate elections on earnings between PT and UEL and at 2% on earnings that exceed UEL. 

30.   These rates are uprated by CPI.  2 3

31.   Class 3 NICs can be paid by contributors to make the year a qualifying year for basic State Pension, new State Pension and Bereavement Benefit purposes. 

 

 

 

 

 

 

 

Capital Gains Tax rates and annual tax-free allowances

Each tax year nearly everyone who is liable to Capital Gains Tax gets an annual tax-free allowance - known as the ‘Annual Exempt Amount’. You only pay Capital Gains Tax if your overall gains for the tax year (after deducting any losses and applying any reliefs) are above this amount.

Tax-free allowances for Capital Gains Tax

The annual tax-free allowance (known as the Annual Exempt Amount) allows you to make a certain amount of gain each year before you have to pay tax. Nearly everyone who is liable to Capital Gains Tax gets this tax-free allowance.

There’s one Annual Exempt Amount for:

·         most individuals who live in the UK

·         executors or personal representatives of a deceased person’s estate

·         trustees for disabled people

Most other trustees get a lower Annual Exempt Amount.

From 2015 to 2016, non-residents who dispose of a UK residential property will be liable to Capital Gains Tax and, in most cases, will be able to claim the Annual Exempt Amount in the same way as for UK residents. However, this Annual Exempt Amount will not be available to companies who dispose of a UK residential property as other allowances may be claimed.

Annual Exempt Amounts

Customer group

2014 to 2015

2015 to 2016

2016

to 2017

Individuals, personal representatives and trustees for disabled people

£11,000

£11,100

£11,100

Other trustees

£5,500

£5,550

£5,550

You can use your Annual Exempt Amount against the gains charged at the highest rates to minimise the tax you owe. See the section on ‘Rates for Capital Gains Tax’ below for an example.

 

Executors and personal representatives

If you’re acting as an executor or personal representative for a deceased person’s estate, you may get the full Annual Exempt Amount during the ‘administration period’. The administration period is usually the time it takes to settle the deceased person’s affairs and get a grant of probate (or confirmation in Scotland). You’re entitled to the Annual Exempt Amount for the tax year in which the death occurred and the following two tax years. After that there’s no tax-free allowance against gains during the administration period.

Find out more about death, inheritance and Capital Gains Tax.

 

Trustees for disabled people

If you’re acting as a trustee for a disabled person you use the higher Annual Exempt Amount above - and not the rate for ‘other trustees’. A disabled person in this context is a person who has mental health problems or receives the middle or higher rate of Attendance Allowance or Disability Living Allowance.

Find out more about Capital Gains Tax and trusts.

 

People who are ‘non-domiciled’ in the UK

You won’t get the Annual Exempt Amount if you’re ‘non-domiciled’ in the UK and you’ve claimed the ‘remittance basis’ of taxation on your foreign income and gains. You may be ‘non-domiciled’ in the UK, for example, if you were born in another country and intend to return there. You may have claimed the ‘remittance basis’ if you have income and gains from abroad and have decided that it’s beneficial to be taxed on the foreign income and gains that you bring into the UK, rather than on all income and gains that arise. Issues of domicile and tax on foreign gains are complicated. A lot depends on the facts of each case. You can find out more by following the link below. Or speak to your Tax Office about your specific circumstances.

Read guidance on Residence, domicile and the remittance basis: RDR1.

Telephone or write to HMRC.

 

 

 

 

 

Rates for Capital Gains Tax

Tax years 2013 to 2016

The following Capital Gains Tax rates apply:

·         18% and 28% tax rates for individuals (the tax rate you use depends on the total amount of your taxable income, so you need to work this out first)

·         28% for trustees or for personal representatives of someone who has died

·         10% for gains qualifying for Entrepreneurs’ Relief

·         28% for Capital Gains Tax on property where the Annual Tax on Enveloped Dwellings is paid - the Annual Exempt Amount is not applicable

·         20% for companies (non-resident Capital Gains Tax on the disposal of a UK residential property) (2015/16)

 

Tax years 2016 to 2017

The following Capital Gains Tax rates apply (the tax rate you use depends on the total amount of your taxable income, so you need to work this out first):

·         10% and 20% tax rates for individuals (not including residential property and carried interest)

·         18% and 28% tax rates for individuals for residential property and carried interest

·         20% for trustees or for personal representatives of someone who has died (not including residential property)

·         28% for trustees or for personal representatives of someone who has died for disposals of residential property

·         10% for gains qualifying for Entrepreneurs’ Relief

·         28% for Capital Gains Tax on property where the Annual Tax on Enveloped Dwellings is paid - the Annual Exempt Amount is not applicable

·         20% for companies (non-resident Capital Gains Tax on the disposal of a UK residential property)

 

2010 to 11

For gains on or before 22 June 2010

Capital Gains Tax is charged at a flat rate of 18%.

For capital gains made from 23 June 2010 to 5 April 2011

The following Capital Gains Tax rates apply to gains after this date:

·         18% and 28% tax rates for individuals (the tax rate you use depends on the total amount of your taxable income, so you need to work this out first)

·         28% for trustees or for personal representatives of someone who has died

·         10% for gains qualifying for Entrepreneurs’ Relief

 

2009 to 2010 and 2008 to 2009

Capital Gains Tax is charged at a flat rate of 18%.

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