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March 2016 Tax Rates and Allowances

Income tax
  2016/17 2015/16
Starting rate for savings only income 0% £5000 £5,000
Basic rate 20% (7.5% for dividends above £5,000) £32,000 £31,785
Higher rate 40% (32.5% for dividends)

£-32,001 -

£150,000

£31,786 -

£150,000

Additional rate 45% (38.1% for dividends) £150,001+ £150,001+

Personal savings allowance - 0% for basic rate tax payers on £1000, £500 for higher rate tax payers.

20% 20%
Personal Allowances
  2016/17 2015/16
Everyone £11,000 £10,600
   

 

     
     
 
*Reduced by £1 for every £2 where income exceeds £100,000

 

 

Pensions
   

Annual allowance

100% of net relevant earnings or £3,600 if higher

capped at:

£40,000

2016/17
Note: Ability to utilise unused annual allowances of up to £40,000 for 2016 and 2015 and £50,000 per year for previous tax year if member of defined benefit or contribution scheme in previous 3 years. Amount is tapered if adjusted annual income exceeds £150,000.
Lifetime limit £1 million
 
Amounts exceeding lifetime limit taxed at 55% if extracted as a lump sum, or 25% if not
 
Inheritance Tax
Exempt transfers:
Gifts to UK domiciled spouse
Gifts to charity
Overseas domiciled spouse up to £325,000
Annual exemption £3,000
Small gifts £250
Wedding gifts - £5000 child, £2500 grandchild or remoter issue, £1000 other
Non UK assets held by a non domiciled individual
Nil rate band: £325,000 (15/16 £325,000)
Rate of tax at death 40%*
*36% where 10% of estate left to charity
Lifetime tax rate 20%
No tax on transfers to individuals unless death within 7 years
Reduced tax charge on gifts made when death is within 7 years
Years:
0-3 3-4 4-5 5-6 6-7
% taxable
100 80 60 40 20
Capital Gains Tax
  2016/17 2015/16
Individual Exemption £11,100 £11,100
Chattels Exemption £6,000 £6,000
Trusts exemption £5,500 £5,500
Transfers between husband and wife living together are exempt.
Main Rate 20%^ 28%
Basic Rate 10%^ 18%
Entrepreneurs Rate* 10% 10%

* Available on first £10 million of eligible gains in lifetime

^ Does not apply to residential property which remains at 28% and 18%

 

Corporation Tax
Year commencing 1 April 2016 1 April 2015
   20%  20%
     
     
     
 
Main Capital Allowances
Motor cars (based on CO2 emissions)
Less than 75g/km CO2 - 100%;
93-130g/km CO2 - 18% rb;
More than 130g/km CO2 - 8% rb
 
Plant & Machinery * - 18% rb
Computer Equipment * - 18% of rb
 
Integral features - 8% rb
Goodwill - 4%
   

*Annual Investment Allowance - 100% allowance on certain capital expenditure up to £200,000pa

rb = reducing balance

 

Value Added Tax
Standard Rate
From 1st January 2016 20.00%
   
VAT fraction
From 1st January 2016 1/6
   
Turnover registration limit £83,000
Turnover deregistration limit £81,000
Cash/annual accounting registration limit £1.35m excl. VAT
Cash/annual accounting £1.6m excl. VAT
Flat rate scheme income £150,000 excl. VAT
Flat rate scheme income deregistration limit £230,000 incl. VAT
VAT Scale Charge: Now based upon the CO2 Emissions of the vehicle concerned
NI Contributions
2015/16
Class 1 Employer Employee
Weekly earnings % of all earnings
£0 - £112 NIL NIL
£113-155 0.00% 0%
£156 - £827 13.80% 12%
Over £827 13.80% 2%
The above rates apply to those not contracted out of S2P.
Class 1A Employer 13.80%
Class 2* S/Employed £2.80 pw
Class 3 Voluntary £14.10 pw
Class 4 S/Employed  
  £0-£8,060 0%
  £8,061 - £43,000 9%
  Over £43,000 2%
* Payable on net earnings over £5,965 (15/16 £5,965)
Vehicle Benefits
Chargeable on employees and directors earning £8,500 or over (including benefits)
Car Benefit*: This is now calculated as a percentage of the original list price of the vehicle.

Car Fuel Benefit*: This is now calculated as a percentage of a fixed sum of £22,200.

* Percentage used will be dependent on the level of CO2 vehicle emissions
Van benefit per vehicle: £3,170 if there is any private use. Travel between home and work is no longer considered private use
Van Fuel Benefit: £598
 
Mileage Allowances
The maximum tax-free mileage allowances for employees using their own cars for business are as follows:
2016/17 First 10,000 Miles 10,000+ miles
Car & Van 45p 25p
Motorcycle 24p 24p
Bicycle 20p 20p
Notes: 1 Payments in excess of approved rates are taxable 2 Where payments are made at rates less than the approved rates, employees can claim tax relief on shortfall
 
Stamp Duty Land Tax

Residential Properties

SDLT is charged at the following rates for each portion of the purchase price.

Property purchase price SDLT rate
Up to £125,000 0%
The next £125,000 (the portion from £125,001 to £250,000) 2%
The next £675,000 (the portion from £250,001 to £925,000) 5%
The next £575,000 (the portion from £925,001 to £1.5 million) 10%
The remaining amount (the portion above £1.5 million) 12%

SDLT is charged at a flat rate of 15% on residential properties costing more than £500,000 purchased by certain corporate bodies

 

 

Non-Residential or Mixed Use Property

SDLT is charged at the following rates for each portion of the purchase price.

Property purchase price SDLT rate
Up to £150,000 0%
The next £150,001 (the portion from £150,001 to £250,000) 2%
Above £250,000 5%
   

Different rates may apply to leases.

 

Annual Tax on Enveloped Dwellings (ATED)

ATED may be payable annually on UK residential properties owned partly or wholly by certain corporate bodies, at the following rates:

Property value

 

2016/17
2015/16

Less than £500,000 0  

£500,000 to £1 million

£3500  

Between £1 million and £2 million

£7,000 £7,000
Between £2 million and £5 million £23,350 £23,350
Between £5 million and £10 million £54,450 £54,450
Between £10 million and £20 million £109,050 £109,050
More than £20 million £218,200 £218,200