2016 budget details
AT-A-GLANCE
Note: It must be remembered that these proposals are subject to amendment.
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 |
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(10% relief) | ||
Either partner born before 6.4.1938 |
£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* |
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Basic rate taxpayers | £1,000 | N/A |
Higher rate taxpayers | £500 | N/A |
Additional rate taxpayers | N/A | N/A |
Income tax rates |
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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 |
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Standard annual allowance | £40,000 | £40,000 |
Standard lifetime allowance | £1,000,000 | £1,250,000 |
ISA subscription limits |
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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. |
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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. |
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INHERITANCE TAX | Death 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). |