|Personal Allowance (PA)*°||£11,000||£10,600|
|Blind Person’s Allowance||2,290||2,290|
|Dividend Tax Allowance (DTA) §||5,000||N/A|
|Personal Savings Allowance (PSA) §|
|‐ Basic rate taxpayer||1,000||N/A|
|‐ Higher rate taxpayer||500||N/A|
- *PA will be withdrawn at £1 for every £2 by which ‘adjusted income’ exceeds £100,000. There will therefore be no allowance given if adjusted income is £122,000 or more (2015/16: £121,200).
- ° Up to 10% of the PA (2016/17: £1,100; 2015/16: £1,060) can be transferred to a spouse or civil partner who is no more than a basic rate taxpayer.
- § The DTA taxes the first £5,000 of dividend income at nil rather than the rate that would otherwise apply ‐ see rates below. PSA operates as a nil rate band for interest income.
|Basic rate band (BRB)||£32,000||£31,786|
|Higher rate band (HRB)||32,001-150,000||31,786-150,000|
|Additional rate||over 150,000||over 150,000|
- BRB and additional rate threshold are increased by personal pension contributions (up to permitted limit) and Gift Aid donations.
Rates differ for General/Savings/Dividend income
- General income (salary, pensions, business profits, rent) uses personal allowance, basic rate and higher rate bands before savings income (interest). To the extent that savings income falls in the first £5,000 of the basic rate band, it is taxed at nil rather than 20%. The PSA (see allowances above) will tax interest at nil, where it would otherwise be taxable at 20% or 40%.
- Dividends are taxed as the ‘top slice’ of income. For 2016/17, the dividend received is taxable. In 2015/16, the dividend received was grossed up by 100/90 to determine the taxable dividend. A non-repayable tax credit equal to 10% of the taxable amount was then deductible against the income tax liability on the taxable dividend.
High Income Child Benefit Charge (HICBC)
1% of child benefit for each £100 of adjusted net income between £50,000 and £60,000.
Remittance basis charge
For non-UK domiciled individuals who have been UK resident in at least:
|7 of the preceding 9 tax years||£30,000||£30,000|
|12 of the preceding 14 tax years||60,000||60,000|
|17 of the preceding 20 tax years||90,000||90,000|
|Lifetime allowance (LA)||£1.00m||£1.25m|
|Annual allowance (AA)*||40,000||40,000|
|LA charge if excess drawn as||cash 55%/income 25%|
|AA charge on excess inputs||20%-45%|
- Annual relievable pension inputs are the higher of earnings (capped at AA) or £3,600.
- *For 2016/17 the AA is usually reduced by £1 for every £2 by which relevant income exceeds £150,000, down to a minimum AA of £10,000.
|New state pension §||155.65||N/A|
- §applies to those reaching state retirement age after 5 April 2016.
Annual investment limits
|Individual Savings Account||£15,240||£15,240|
|EIS ‐ 30% relief||1,000,000||1,000,000|
|EIS eligible for CGT deferral relief||Unlimited||Unlimited|
|Seed EIS (SEIS) ‐ 50% relief||100,000||100,000|
|SEIS ‐ 50% exemption for reinvested gains||100,000||100,000|
|Venture Capital Trust (VCT) ‐ 30% relief||200,000||200,000|
National Insurance Contributions
Class 1 (Employees)
|Main NIC rate||12.0%||13.8%|
|No NIC on first||£155pw||£156pw|
|Main rate* charged up to||£827pw||no limit|
|2% rate on earnings above||£827pw||N/A|
|Employment allowance per business**||N/A||£3,000|
- *Nil rate of employer NIC for employees under the age of 21 and apprentices under 25, up to £827pw.
- Employer contributions (at 13.8%) are also due on most taxable benefits (Class 1A) and on tax paid on an employee’s behalf under a PAYE settlement agreement (Class 1B).
- **Some businesses do not qualify, including certain sole director companies.
Class 2 (Self-employed)
|Flat rate per week||£2.80|
|Small profits threshold||£5,965|
Class 3 (Voluntary)
|Class 3:Flat rate per week||£14.10|
|Class 3A:Contributions vary with age|
Class 4 (Self-employed)
|On profits £8,061 ‐ £43,000||9.0%|
|On profits over £43,000||2.0%|
Taxable benefit: Chargeable value multiplied by chargeable %.
Initial list price of car (including most accessories), reduced by any capital contribution (maximum £5,000) by employee when the car is first made available.
|CO2 emissions g/km||Petrol||Diesel|
|Above 94||Add 1% for every 5g/km|
|Above 200 (petrol)/ 185 (diesel)||37% maximum|
Chargeable value of £3,170 (2015/16 £3,150) if private use is more than home-to-work.
Employer provides fuel for private motoring in an employer-owned:
Car: CO2-based percentage from above table multiplied by £22,200 (2015/16 £22,100).
Van: £598 (2015/16 £594).
Employee contributions do not reduce taxable figure unless all private fuel is paid for by the employee (in which case there is no benefit charge).
Tax-free mileage allowances
|Employee’s own transport||per business mile|
|Cars first 10,000 miles||45p|
|Cars over 10,000 miles||25p|
Capital Gains Tax
|Individual (to basic rate limit)*||10%||18%|
|Individual (above basic rate limit)*||20%||28%|
|Entrepreneurs’ Relief (ER)**||10%||10%|
- *In 2016/17, individuals are taxed at 18%/28% on gains on residential property and receipt of carried interest. Trusts are taxed at 28% in these circumstances.
- **ER is available for lifetime gains of up to £10m. Qualifying disposals include a trading business, shares in a trading company (from a minimum 5% holding) by an officer/employee or certain holdings by external investors. Various conditions apply.
|Corporation Tax rate||20%||20%|
|Research and development relief||From 1.4.2016||From 1.4.2015|
|SME enhanced expenditure
|Large company enhanced expenditure
|Large company R&D Expenditure
Credit (RDEC) scheme**
- *Additional deduction for qualifying R&D
- **Taxable expenditure credit for qualifying R&D
- SMEs that make losses can surrender the deduction to HMRC in exchange for a payment of 14.5% of the loss.
- From 1 April 2016, RDEC will be the only scheme available for large companies.
Main capital allowances
|Plant and machinery||Limit|
|100% Annual Investment Allowance (AIA)|
|‐ expenditure 1.4.14* ‐ 31.12.15||£500,000|
|‐ expenditure post 31.12.15**||200,000|
- * 6.4.14 for unincorporated businesses and LLPs
- **Transitional rules apply for accounting periods straddling a change in AIA limit.
|‐ energy- and water-efficient equipment||100%|
|‐ writing down allowance: general pool (reducing balance)||18%|
|‐ writing down allowance: special rate pool (reducing balance)||8%|
- The special rate pool includes long life assets, integral plant in buildings, thermal insulation.
|Motor cars (expenditure post 31.3.15)|
|CO2 emissions (g/km)||Allowance|
|75 or less (new cars only)||100%|
|Up to 130 (in general pool)||18% pa|
|Above 130 (in special rate pool)||8% pa|
Annual Tax on Enveloped Dwellings (ATED)
ATED applies to ‘high value’ residential properties owned via a corporate structure, unless the property is used for a qualifying purpose. From 1 April 2016 the tax applies to properties valued at more than £500,000 (£1m from 1 April 2015 – 31 March 2016; £2m from 1 April 2013 – 31 March 2015).
|Property value||Annual charge to|
|£0.5m ‐ £1m||£3,500||N/A|
|£1m ‐ £2m||7,000||£7,000|
|£2m ‐ £5m||23,350||23,350|
|£5m ‐ £10m||54,450||54,450|
|£10m ‐ £20m||109,050||109,050|
Stamp Duty Land Tax (SDLT) and
Land and Buildings Transaction Tax (LBTT)
From 1 April 2015, SDLT was replaced in Scotland by LBTT. Like SDLT, it is payable by the purchaser.
|Residential property (1st property only)|
|SDLT*||Rate on band||LBTT||Rate on band|
|Up to 125||Nil||Up to 145||Nil|
|125 ‐ 250||2%||145 ‐ 250||2%|
|250 ‐ 925||5%||250 ‐ 325||5%|
|925 ‐ 1,500||10%||325 ‐ 750||10%|
|Over 1,500||12%||Over 750||12%|
- A supplement of 3% of the total purchase price applies for both SDLT and LBTT where a second home is purchased for more than £40,000 from 1 April 2016.
- *A rate of 15% applies to the total purchase price where the property is valued above £500,000 and purchased by a ‘non-natural person’ (e.g. a company).
|SDLT||Rate on band||LBTT||Rate on band|
|Up to 150||Nil||Up to 150||Nil|
|150 ‐ 250||2%||150 ‐ 350||3%|
|Over 250||5%||Over 350||4.5%|
Value Added Tax
|Standard rate (1/6 of VAT-inclusive price)||20%|
|Registration level from 1.4.2016||£83,000 per annum|
|Deregistration level from 1.4.2016||81,000 per annum|
Flat rate scheme (FRS)
|Annual taxable turnover to enter scheme||Up to £150,000|
|Must leave scheme if annual taxable turnover||Exceeds £230,000|
- If using FRS, the VAT paid by the business is a fixed percentage (based on business category) of “FRS turnover” rather than the net of output tax over input tax. Input tax is usually not recoverable.
Inheritance Tax (IHT)
|Nil rate band*||£325,000||£325,000|
|Rate of tax above nil rate band**||40%||40%|
|Lifetime transfers to and from certain trusts||20%||20%|
- Unlimited exemption for transfers between spouses/civil partners, except if UK domiciled transferor and foreign domiciled transferee, where maximum exemption £325,000.
- 100% Business Property Relief (BPR) for all shareholdings in qualifying unquoted trading companies, qualifying unincorporated trading businesses and certain farmland/buildings.
- 100% Agricultural Property Relief (APR) available on agricultural value of qualifying farmland/buildings.
- BPR or APR available at 50% on certain property.
- * Up to 100% of the proportion of a deceased spouse’s/civil partner’s unused nil rate band may be claimed to increment the current nil rate band when the survivor dies.
- ** Rate reduced to 36% if at least 10% of the relevant estate is left to charity.
Reduced tax charge on gifts within 7 years before death
|Years before death||0-3||3-4||4-5||5-6||6-7|
|% of full death tax charge payable||100||80||60||40||20|
- Annual exemptions for lifetime gifts include £3,000 per donor and £250 per recipient.
Key dates and deadlines
|1st payment on account||31 January||2017||2016|
|2nd payment on account||31 July||2017||2016|
|Balancing payment||31 January||2018||2017|
|Capital Gains Tax||31 January||2018||2017|
|Other payment dates|
|Class 1A NIC||19 July||2017||2016|
|Class 1B NIC||19 October||2017||2016|
- Corporation tax is due 9 months and 1 day from the end of the accounting period, unless a ‘large’ company paying by quarterly instalments.
|2015/16 Filing deadlines|
|Issue P60s to employees||31 May 2016|
|P9D, P11D, P11D(b)||6 July 2016|
|Self assessment tax return (SATR) paper version||31 October 2016|
|Online SATR if outstanding tax
to be included in 2017/18 PAYE code
|30 December 2016|
|Online SATR||31 January 2017|
|National Minimum Wage
Rates per hour
|From 1.10.16||From 1.10.15|
|Aged 21 and over*||£6.95||£6.70|
|Aged 18 — 20||5.55||5.30|
|Aged 16 — 17||4.00||3.87|
- *The “National Living Wage” for those over 25 is £7.20 from 1 April 2016.
|First eligible child||£20.70||£20.70|
|Each subsequent child||13.70||13.70|
You are advised to consult us before acting on any information contained herein.