Rates and Allowances
- Income Tax Rates
- Income Tax Reliefs
- Pension Premiums
- Individual Savings Accounts (ISAs)
- Car, Van and Fuel Benefits
- Mileage Allowance Payments
- Capital Gains Tax
- Corporation Tax
- Stamp Duty and Stamp Duty Land Tax
- Inheritance Tax
- National Insurance
- Value Added Tax
- Capital Allowances
Income Tax Rates
|Band £||Rate %||Band £||Rate %|
|0 – 5,000||0*||0 – 5,000||10*|
|0 – 31,785||20**||0 – 32,000||20**|
|31,786 – 150,000||40***||32,001 – 150,000||40***|
|Over 150,000||45****||Over 150,000||45****|
*Only applicable to savings income. The rate is not available if taxable non-savings income exceeds £5,000 (£2,880).
** Except dividends (10%).
*** Except dividends (32.5%).
**** Except dividends (37.5%).
Other income taxed first, then savings income and finally dividends.
Income Tax Reliefs
|– born after 5 April 1948||10,600**||11,000|
|– born after 5 April 1938 and before 6 April 1948*||10,600**||11,000|
|– born before 6 April 1938*||10,660**||11,000|
|(Reduce personal allowance by £1 for every £2 of adjusted net income over £100,000.)**£1,060 may be transferable between certain spouses where neither pay tax above the basic rate.|
|Married couple’s allowance (relief at 10%)*(Either partner 75 or over and born before 6 April 1935.)||8,355||8,355|
|– min. amount||3,220||3,220|
|*Age allowance income limit(Reduce age allowance by £1 for every £2 of adjusted net income over £27,700 (£27,000).)||27,700||27,700|
|Blind person’s allowance||2,290||2,290|
Tax relief available for personal contributions: higher of £3,600 (gross) or 100% of relevant earnings. Any contributions in excess of £40,000, whether personal or by the employer, may be subject to income tax on the individual.
The limit may be reduced to £10,000 once money purchase pensions are accessed.
Where the £40,000 limit is not fully used it may be possible to carry the unused amount forward for three years.
Employers will obtain tax relief on employer contributions if they are paid and made ‘wholly and exclusively’. Tax relief for large contributions may be spread over several years.
Individual Savings Accounts (ISAs)
|Overall investment limit||£15,240||£15,000*|
Car, Van and Fuel Benefits
Company cars 2015/16
CO2 emissions (gm/km)
(round down to nearest 5gm/km)
% of car’s list price taxed
|210 and above||37|
- For diesel cars add a 3% supplement but maximum still 37%.
- For cars registered before 1 January 1998 the charge is based on engine size.
- The list price includes accessories and is not subject to an upper limit.
- The list price is reduced for capital contributions made by the employee up to £5,000.
- Special rules may apply to cars provided for disabled employees.
*Rounding down to the nearest 5gm/km does not apply.
Car fuel benefit 2015/16
£22,100 x ‘appropriate percentage’ *
*Percentage used to calculate the taxable benefit of the car for which the fuel is provided.
The charge does not apply to certain environmentally friendly cars.
The charge is proportionately reduced if provision of private fuel ceases part way through the year. The fuel benefit is reduced to nil only if the employee pays for all private fuel.
Van benefit per vehicle 2015/16
- Van benefit £3,150
- Fuel benefit £594
The charges do not apply to vans if a ‘restricted private use condition’ is met throughout the year.
A reduced charge may be due if the van cannot in any circumstances emit CO2 by being driven.
Mileage Allowance Payments
2015/16 and 2014/15
Cars and vans
Rate per mile
|Up to 10,000 miles||45p|
|Over 10,000 miles||25p|
These rates represent the maximum tax free mileage allowances for employees using their own vehicles for business. Any excess is taxable. If the employee receives less than the statutory rate, tax relief can be claimed on the difference.
Capital Gains Tax
|*For higher and additional rate taxpayers.|
Year to 31.3.16
Year to 31.3.15
|0 – 300,000||20*|
|300,001 – 1,500,000||21.25*|
*The profits limits are reduced for accounting periods of less than 12 months and for a company with associated companies.
Different rates apply for ring-fenced (broadly oil industry) profit.
Stamp Duty and Stamp Duty Land Tax
Land and buildings in England, Wales and N. Ireland
|0||0 – 125,000||0 – 150,000||0|
|2||125,001 – 250,000||150,001 – 250,000||1|
|5||250,001 – 925,000||250,001 – 500,000||3|
|10||925,001 – 1,500,000||Over 500,000||4|
|12||1,500,001 and over||-||-|
*Payable on consideration which falls in each bracket.
**Payable on total consideration once limit is breached.
SDLT is charged at 15% on interests in residential dwellings costing more than £500,000 purchased by certain non-natural persons for acquisitions with an effective date on or after 20 March 2014.
Shares and securities – rate 0.5%.
|Nil||Nil||0 – £325,000*|
*Potentially increased for surviving spouses or civil partners who die on or after 9 October 2007.
|Annual exemption||£3,000||Marriage||- parent||£5,000|
|Small gifts||£250||- grandparent||£2,500|
Reduced charge on gifts within seven years of death
|Years before death||0-3||3-4||4-5||5-6||6-7|
|% of death charge||100||80||60||40||20|
2015/16 Class 1 (employed) contracted in rates
|Earnings per week||%||Earnings per week**||%|
|Up to £155||Nil*||Up to £156||Nil|
|£155.01 – £815||12||Over £156||13.8**|
|*Entitlement to contribution-based benefits retained for earnings between £112 and £155 per week.|
**The rate is 0% in relation to employees under 21 on earnings up to £815 per week.
|Class 1A (employers)||13.8% on employee taxable benefits|
|Class 1B (employers)||13.8% on PAYE Settlement Agreements|
|Class 2 (self-employed)||flat rate per week £2.80|
small profits threshold £5,965 p.a.
|Class 3 (voluntary)||flat rate per week £14.10|
|Class 4 (self-employed)||9% on profits between £8,060 and £42,385 plus 2% on profits over £42,385|
Value Added Tax
|Annual Registration Limit – from 1.4.15 (1.4.14 – 31.3.15 £81,000)||£82,000|
|Annual Deregistration Limit – from 1.4.15 (1.4.14 – 31.3.15 £79,000)||£80,000|
Plant and machinery – Annual Investment Allowance (AIA)
The AIA gives a 100% write-off on most types of plant and machinery costs, including integral features and long life assets but not cars, of up to £500,000 p.a. for expenditure incurred on or after 6 April 2014 (1 April 2014 for companies). The rate may be reduced to £25,000 for expenditure incurred on or after 1 January 2016. Special rules apply to accounting periods straddling these dates.
Any costs over the AIA fall into the normal capital allowance pools below. The AIA may need to be shared between certain businesses under common ownership.
Other plant and machinery allowances
The annual rate of allowance is 18%. An 8% rate applies to expenditure incurred on integral features and on long life assets.
A 100% first year allowance may be available on certain energy efficient plant and cars, including expenditure incurred on new and unused zero emission goods vehicles.
For expenditure incurred on cars, costs are generally allocated to one of the two plant and machinery pools. Cars with CO2 emissions not exceeding 130gm/km receive an 18% allowance p.a. Cars with CO2 emissions over 130gm/km receive an 8% allowance p.a.