tax

Personal Tax Rates 2015/16

Personal taxation

Income tax allowances and reliefs 2015/16 2014/15
Personal (basic) £10,600 £10,000
Personal allowance reduced if net income exceeds* £100,000 £100,000
Transferable tax allowance for married couples/civil partners £1,060 N/A
Personal (age) if born between 6/4/38 and 5/4/48 N/A £10,500
Personal (age) if born before 6/4/38 £10,660 £10,660
Personal (age) reduced if net income exceeds* £27,700 £27,000
Married couples/civil partners (minimum) at 10% § £3,220 £3,140
Married couples/civil partners (maximum) at 10%* § £8,355 £8,165
Child benefit charge:
- 1% of benefit for every £100 of income between £50,000 and £60,000
Blind person’s allowance £2,290 £2,230
Rent-a-room tax-free income £4,250 £4,250
Venture capital trust (VCT) at 30% £200,000 £200,000
Enterprise investment scheme (EIS) at 30% £1,000,000 £1,000,000
- EIS eligible for capital gains tax (CGT) deferral relief No limit No limit
Seed EIS (SEIS) at 50% £100,000 £100,000
- SEIS CGT reinvestment relief 50% 50%
Registered pension scheme:
- annual allowance £40,000 £40,000
- money purchase annual allowance £10,000 N/A
- lifetime allowance £1,250,000 £1,250,000
* £1 reduction for every £2 of additional income over the income threshold.
§ Where at least one spouse/civil partner was born before 6/4/35.
Income tax rates 2015/16 2014/15
Starting rate 0% 10%
- on savings income up to** £5,000 £2,880
Basic rate of 20% on income up to £31,785 £31,865
Higher rate of 40% on income £31,786- £150,000 £31,866- £150,000
Additional rate of 45% on income over £150,000 £150,000
Dividends for:
- basic rate taxpayers 10% 10%
- higher rate taxpayers 32.5% 32.5%
- additional rate taxpayers 37.5% 37.5%
Trusts:  
- standard rate band generally £1,000 £1,000
- dividends (rate applicable to trusts) 37.5% 37.5%
- other income (rate applicable to trusts) 45% 45%
** Not available if taxable non-savings income exceeds the starting rate band.

 

Income tax – personal allowance and basic rate band

For 2015/16 the personal allowance will rise from £10,000 to £10,600 and there will be an £80 reduction in the basic rate band to £31,785, as previously announced. The personal allowance will be increased to £10,800 for 2016/17 and £11,000 for 2017/18. The basic rate limit will be increased to £31,900 for 2016/17 and £32,300 for 2017/18.

SAVER – Protect your personal allowance. In 2015/16 your personal allowance is reduced by 50p for every pound your income is over £100,000. If you can reduce your income below £100,000, eg by making a pension contribution or charitable gift, you should benefit from the full allowance.

Class 2 national insurance contributions (NICs)

The government intends to abolish Class 2 NICs in the next parliament and reform Class 4 NICs to introduce a new benefit test. There will be consultation on the detail and timing of these reforms later in 2015.

Tax-free childcare

The maximum amount that parents of disabled children will be able to receive under the new childcare scheme starting in the autumn will be increased from £2,000 to £4,000 a year for each disabled child.

Company car benefit

From 2019/20 the scale percentage of the list price of company cars that are subject to tax will be increased by 3% up to a maximum of 37% for cars emitting more than 75g/km of CO2. There will be a 3% differential between the 0–50g/km and 51–75g/km bands and between the 51–75g/km and 76–94g/km bands. The rates for years up to 2018/19 are as previously announced.

Van benefit charge (VBC)

From 6 April 2016 the main VBC will increase in line with RPI. As previously announced, lower rates of VBC for zero emission vans will be extended to 5 April 2020 on a tapered basis.

Fuel benefit charge

From 6 April 2016 the fuel benefit charge multiplier for both cars and vans will increase in line with RPI.

Tax returns and tax payment

During the next parliament, digital tax accounts will be introduced to remove the need for individuals and small businesses to complete annual tax returns. Further details about the policy and administrative changes will be published later in 2015. Over the summer there will also be consultation on a new payment process to enable tax and NICs to be collected via digital accounts.

Employee benefits and expenses

From April 2015 there will be a statutory exemption for employees’ trivial benefits-in-kind costing less than £50, as previously announced. An annual cap of £300 will also be introduced for directors and other office holders of close companies and employees who are family members of those office holders.

From April 2016, the £8,500 threshold below which employees do not pay income tax on certain benefits-in-kind will be removed and replaced with new exemptions for carers and ministers of religion. The current dispensation regime will be replaced with an exemption for certain reimbursed expenses and a statutory framework will be introduced for voluntary payrolling. The new exemptions for reimbursed expenses will not be available if used in conjunction with salary sacrifice.

SAVER – The new £5,000 0% starting rate band comes into being in 2015/16. If your earnings and/or pensions total not more than £10,600 you may be able to register to receive interest without deduction of tax.

Gift Aid small donations scheme

The maximum annual donation amount that can be claimed through the Gift Aid small donations scheme will increase from £5,000 to £8,000. This will take effect from April 2016, allowing charities and Community Amateur Sports Clubs to claim Gift Aid top-up payments of up to £2,000 a year.