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Income Tax

 2016-172015-16
Basic rate band – income up to £32,000 £31,785
Starting rate for savings *0% 0%
Basic rate 20% 20%
Dividend ordinary rate **7.5% 0%
Higher rate – income over £32,000 £31,785
Higher rate 40% 40%
Dividend upper rate **32.5% 25%
Additional rate – income over £150,000 £150,000
Additional rate 45% 45%
Dividend additional rate **38.1% 30.6%
Starting rate limit (savings income) *£5,000 *£5,000

For 2016/17 Scottish taxpayers effectively subject to the same income tax rates as rest of UK. *If an individual’s taxable non-savings income exceeds starting rate limit, then starting rate limit for savings will not be available for savings income. For 2016/17, £1,000 of savings income for basic rate taxpayers (£500 higher rate) may be tax-free. **For 2016/17 first £5,000 of dividends tax-free.

Personal allowances (PA)  
Born after 5 April 1938 £11,000 £10,600
Born before 6 April 1938 *£11,000 *£10,660
Married couple’s allowance (MCA) (relief restricted to 10%)  
Either partner born before 6 April 1935 *£8,355 *£8,355
Transferable Tax Allowance  
for certain married couples (relief 20%) £1,100 £1,060

*Allowances are reduced by £1 for every £2 that adjusted net income exceeds £27,700 to a minimum PA of £11,000 (£10,600) and to a minimum MCA of £3,220. Where adjusted net income exceeds £100,000, PA is reduced in the same way until it is nil regardless of the individual’s date of birth.

Tax Shelters  
Venture Capital Trust up to £200,000 £200,000
Enterprise Investment Scheme up to £1,000,000 £1,000,000
Seed Enterprise Investment Scheme up to £100,000 £100,000
Social Investment Tax Relief £1,000,000 £1,000,000

Tax Free Savings Accounts 2015/16: ISA subscription limit £15,240 Junior ISA and CTF subscription limit £4,080

Company Cars and Vans

Company car benefit is calculated by applying the appropriate percentage (based on the car’s CO2 emissions – see table below) to the car’s UK list price.

CO2 emissions (g/km)Appropriate %CO2 emissions (g/km)Appropriate %
PetrolDieselPetrolDiesel
0 - 50 7 10 150 - 154 27 30
51 - 75 11 14 155 - 159 28 31
76 - 94 15 18 160 - 164 29 32
95 - 99 16 19 165 - 169 30 33
100 - 104 17 20 170 - 174 31 34
105 - 109 18 21 175 - 179 32 35
110 - 114 19 22 180 - 184 33 36
115 - 119 20 23 185 - 189 34 37
120 - 124 21 24 190 - 194 35
125 - 129 22 25 195 - 199 36
130 - 134 23 26 200 - 204 37
135 - 139 24 27 205 - 209
140 - 144 25 28 200 and above
145 - 149 26 29

Company car fuel benefit is charged unless the cost of all fuel for private use is borne by the employee. The taxable benefit is calculated by applying the appropriate % to the car fuel benefit charge multiplier (£22,200). Where VAT is to be reclaimed on fuel for private use, the employer also has to account for output tax based on a flat rate charge derived from the vehicle’s CO2 emissions.

Company van benefit is generally not related to CO2 emissions but is a set figure of £3,170 with an extra £598 where fuel for private use is provided. Van benefit charge for zero emission vans £634.

Employees using their own cars for business: Approved mileage allowance payments are 45p per mile for the first 10,000 miles in the tax year and 25p thereafter. Income tax and NICs may be due on higher rates and tax relief may be available on lower rates.

Capital Gains Tax

On chargeable gains   2016-17
Total taxable income and gains – up to £32,000 10%
  – from £32,001 20%
Trust rate   20%

Higher rates may apply to the disposal of certain residential property.
Entrepreneurs’ relief – Qualifying gains will be taxed at 10%. Claims may be made on more than one occasion up to a 'lifetime' total of £10 million • Annual exempt amount – individuals £11,100 and most trustees £5,550

Pension Contributions

There is no financial limit on the amount that may be contributed to a registered pension scheme. The maximum amount on which an individual can claim tax relief in any tax year is the greater of the individual’s UK relevant earnings or £3,600 (gross). If total pension input exceeds the annual allowance (£40,000) there may be a tax charge on the excess. From 6 April 2016 the annual allowance may be reduced by £1 for every £2 of adjusted income over £150,000 to a minimum of £10,000. Maximum age for tax relief is 74. Lifetime allowance charge – lump sum paid 55% and monies retained 25% on cumulative benefits exceeding £1 million.

Inheritance Tax

Inheritance Tax 2016-17 2015-16
Standard threshold £325,000 £325,000
Combined threshold maximum £650,000 £650,000
for married couples and civil partners    
Rate of tax on balance:    
Chargeable lifetime transfers 20% 20%
Transfers on, or within 7 years of, death 40% 40%
subject to a tapered reduction for transfers between 7 and 3 years before death
Exemptions may be available; please contact us for relevant information and advice.

National Insurance Contributions

Class 1 (not contracted out)Employee (primary)Employer (secondary)
Payable on weekly earnings of:    
Below £112 (lower earnings limit) Nil -
£112 - £155 (primary threshold) *0% -
Up to £156 (secondary threshold) - Nil
Above £156 - 13.8%
£155.01 - £815 (upper earnings limit) **12% -
£156.01 - £815 (upper secondary threshold - under 21s) 12% 0%
Above £805 **2% -
*No NICs are actually payable but notional Class 1 NIC is deemed to have been paid; this protects contributory benefit entitlement.
**Over state pension age, the employee contribution is generally nil.

Employment Allowance

up to £3,000 (per year)
Class 1A On relevant benefits 13.8% Class 2 Self employed £2.80 per week; small profits threshold £5,965 per annum Class 3 Voluntary £14.10 per week Class 3A Voluntary contributions may be available to 5 April 2017 in order to obtain extra additional State Pension (max £25 a week) Class 4 Self employed on profits £8,060 - £43,000 *9%; excess over £43,000 *2%
*Exemption applies if state pension age was reached by 6 April 2016.

Stamp Duty Land Tax

On the transfer of property ♦, the Stamp Duty Land Tax is: ResidentialNon-Residential
Value up to £125,000* 0% 0%
Over £125,000*– £250,000 2% 2%
Over £250,000 – £500,000 5% 5%
Over £500,000 – £925,000† 5% 5%
Over £925,000† – £1,500,000† 10% 5%
Over £1,500,000† 12% 5%

Residential SDLT calculated on the consideration falling within each band. Additional SDLT of 3% may apply to the purchase of additional residential properties from 1 April 2016. Non-residential SDLT is also calculated on the consideration falling within each band. * Non-residential £150,000. † Residential Property Only. ♦ From 1 April 2015 the Land and Buildings Transaction Tax replaced SDLT in Scotland. Contact us for advice.

Capital Allowances

Plant and Machinery: Investment for use in Enterprise Zones, energy saving and environmentally beneficial equipment, new zero-emission goods vehicles, new low CO2 emission (up to 75g/km) cars, natural gas/hydrogen refuelling equipment first year allowance (FYA) 100% • Annual Investment Allowance (AIA) 100%* – on first £200,000 of investment. Excludes cars and expenditure already qualifying for 100% FYA • Writing Down Allowance on expenditure not qualifying for AIA or FYA: Long-life assets, integral features of buildings, cars over 130g/km 8% • Other plant and machinery 18% • Business premises renovation maximum initial allowance 100% *Transitional rules may apply.

Value Added Tax

From 1 April 2016
Standard Rate 20%
VAT Fraction 1/6
Reduced Rate 5%
Current Turnover Limits
Registration – last 12 months/next 30 days over £83,000 from 1 April 2016
Deregistration – next year under £81,000 from 1 April 2016
Annual and Cash Accounting Schemes £1,350,000
Flat Rate Scheme £150,000

Corporation Tax

Financial Year to 31 March 2017 31 March 2016
Corporation Tax rate 20% 20%

Selected Rates

Basic Retirement Pension – Single person £119.30
  – Couple £190.80
Pension Credit Standard Minimum Guarantee – Single person £155.60
  – Couple £237.55
New State Pension   £155.65

Child Benefit is paid at £20.70 (first eligible child) or £13.70 (each subsequent child).
Statutory Pay qualification – average weekly earnings (AWE) £112 or over.
Sick (SSP) The standard rate is £88.45 per week for up to 28 weeks.
Maternity (SMP), Adoption (SAP) and Paternity (SPP) paid at the lower of
£139.58 or 90% of AWE apart from first 6 weeks of SMP which is paid at 90% of AWE. SMP and SAP are payable for up to 39 weeks. SPP is payable for up to 2 weeks.
Jobseeker's Allowance is paid at £73.10 (single person - 25 or over) or £114.85 (couple – both 18 or over). Universal Credit (monthly rates) – Standard allowance for a single person (25 or over) is £317.82. The couple's rate (where one or both are 25 or over) is £498.89. The new Universal Credit is being phased in gradually.
National Living Wage – Workers aged 25 and over – £7.20 from April 2016.

National Minimum Wage: Age 21-24 18-20 16 and 17 Apprentices*
From 1 October 2014 £6.70 £5.30 £3.87 £3.30
From 1 October 2015 £6.95 £5.55 £4.00 £3.40
* Rate applies to apprentices under 19, or 19 and over in the first year of apprenticeship..

Key Dates & Deadlines

Payment Dates   2016-17 2015-16
Income Tax and Class 4 NICs      
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
Class 1A NICs 19 July 2017 2016

Corporation Tax – generally 9 months and one day after the end of accounting period.

2015-16 Returns Filing Deadlines: 31 May 2016 - Issue P60s to employees • 6 July 2016 - P11D and P11D(b) and appropriate copies to employees • 31 October 2016 - Self Assessment Tax Return (SATR) - paper version • 30 December 2016 - SATR Online where outstanding tax (subject to cap) to be included in 2017-18 PAYE code • 31 January 2017 - SATR Online

Under Real Time Information most employers must notify HMRC of payments and deductions on or before the time of payment. Some concessions apply. Budget Day edition. Rates subject to change – contact us for latest. For general guidance only, no responsibility is taken for action taken or refrained from in consequence of card contents.

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