PERSONAL TAXATION

2016/17

2015/16

Personal allowance

Basic £11,000 £10,600
Personal allowance income limit £100,000 £100,000
Born before 6.4.1938 £11,000 £10,660
Age allowance income limit N/A £27,700
Minimum where income exceeds limit N/A £10,600
Transferable allowance £1,100 £1,060

Married couple’s allowance

(10% relief)
Either partner born before 6.4.1935 £8,355 £8,355
Age allowance income limit £27,700 £27,700
Minimum where income
exceeds limit £3,220 £3,220

Blind person’s allowance

£2,290 £2,290

Dividend allowance*

£5,000 N/A

Personal savings allowance*

Basic rate taxpayers £1,000 N/A
Higher rate taxpayers £500 N/A
Additional rate taxpayers N/A N/A

Income tax rates

Starting savings rate** 0%

0%

on income up to £5,000 £5,000
Basic rate 20% 20%
on taxable income up to £32,000 £31,785
Higher rate 40% 40%
on taxable income over £32,000 £31,785
Additional rate 45% 45%
on taxable income over £150,000 £150,000
Dividend ordinary rate*** 7.5% 10%
Dividend upper rate*** 32.5% 32.5%
Dividend additional rate*** 38.1% 37.5%
Dividend tax credit*** N/A 10%

Pension schemes allowances

Standard annual allowance £40,000 £40,000
Standard lifetime allowance £1,000,000 £1,250,000

ISA subscription limits

Adult ISA £15,240 £15,240
Junior ISA £4,080 £4,080

* These allowances take the form of zero rate bands and are not deductions from income.
** Starting rate applies only to savings income. If taxable non-savings income is above this limit, the starting rate is not applicable.

*** For 2015/16 the effective dividend ordinary, upper and additional rates (taking into account the dividend tax credit) are 0%, 25% and 30.6% respectively.

COMPANY TAXATION

FY2016

FY2015

Corporation tax rate

20%

20%

CAPITAL GAINS TAX

2016/17

2015/16

Rate – standard rate

10%*

18%

– higher rate

20%*

28%

– trustees and personal representatives

20%*

28%

– entrepreneurs’ relief rate

10%

10%

Annual exemption – individuals

£11,100

£11,100

– personal representatives

£11,100

£11,100

– trustees

£5,550**

£5,550**

* Rates are 18% & 28% (instead of 10% & 20%) on gains from non-exempt residential property.
** Exemption is apportioned if there are several trusts created by the same settlor, but with each trust entitled to a minimum exemption of £1,110 for both 2016/17 and 2015/16.

INHERITANCE TAX Deaths after

5/4/2012

Threshold / Nil-rate band

£325,000

Death rate

40%

Lower death rate (10% or more given to charity)

36%

Chargeable lifetime transfers rate

20%

VAT

2016/17

Standard rate

20%

Reduced rate

5%

Registration threshold after 31.3.2016

£83,000

(previously £82,000 after 31.3.2015)

NATIONAL INSURANCE 2016/17

(2015/16 in brackets where different)

Class 1 contributions

Not contracted-out

The employee contribution is 12% of earnings between £155 and £827 (£815) p.w. plus 2% of all earnings above £827 (£815) p.w. Between £112 and £155 p.w., no employee contributions are payable but a notional contribution is deemed to have been paid to protect contributory benefit entitlement. The employer contribution is 13.8% of all earnings in excess of the first £156 p.w. The employer contribution is reduced to 0% of earnings between £156 and £827 (£815) p.w. if the employee is under 21. For 2016/17 the contribution is similarly reduced for certain apprentices under 25. In most cases employers can claim employment allowance of up to £3,000 (£2,000) a year against their liability for employer contributions.

Contracting-out for 2015/16

The ‘not contracted-out’ rates for employees in salary-related schemes were reduced for 2015/16 on the band of earnings from £112 p.w. to £770 p.w. by 1.4%. For the employer, they were reduced on the same band of earnings by 3.4%. Contracting-out is abolished for 2016/17, and there are no reductions.

Class 1A and 1B contributions

13.8%

Class 2 contributions

Flat weekly rate

£2.80

Exemption limit

£5,965

Class 3 contributions

Flat weekly rate

£14.10

Class 4 contributions

9% on the band of profits between £8,061 and £43,000 (£42,385) plus 2% on all profits above £43,000 (£42,385).