Tax year 2016/17
Income Tax
Tax rates are:
0% between £0 and £11000
20% between £11000 and £43000
40% between £43000 and £150000
45% above £150000
Personal allowance is £11000 for everyone.
Note 1 – where income exceeds £100000 the personal allowance is reduced by £1 for every £2 of income above £100000.
Note 2 – the amount that married couples and civil partners can transfer to their spouse increases to £1100 (only applicable if both don’t pay above the 20% rate). Please use the following link if you would like to register for this www.gov.uk/marriage-allowance
National Insurance
Self-employed
Class 2’s £2.80 per week but can be exempt if profits below £5965 (class 2’s for 2015/16 to be paid in January 2017 by way of the tax return)
Class 4’s 9% between £8060 and £43000
Class 4’s 2% above £43000
Employees
Class 1’s 12% between £155 and £827 per week
Class 1’s 2% above £827 per week
Employers
Class 1’s 13.8% above £156 per week
Corporation Tax
Gradual reduction from 20% in 2016/17 to 17% by 2020/21.
VAT
Compulsory registration if taxable supplies are above £83000 within the previous 12 months or the next
30 days alone.
The flat rate scheme can be opted for where turnover is less than £150000. You must leave the scheme if turnover goes above £230000.
The cash accounting scheme can be used where turnover is less than £1.35m. You must leave the scheme if turnover goes above £1.6m.
Capital Allowances
The annual investment allowance is £200000 for the calendar year 2016.
Writing down allowances remain at 18%.
Cars with CO2’s up to 75 g/km 100% (but only up to 50 g/km from April 2018)
Cars with CO2’s between 75 g/km and 130 g/km 18% (but only up to 110 g/km from April 2018)
Cars with CO2’s above 130 g/km 8% (but 110 g/km from April 2018)
Leased cars – disallowance of 15% if above 130 g/km (110 g/km from April 2018)
Capital Gains Tax
From 6.4.16, the higher rate of CGT will be reduced from 28% to 20%, and the lower rate will reduce from 18% to 10%. The 28% and 18% rates will continue to apply to chargeable gains on residential property.
The allowance remains at £11100.
Entrepreneurs Relief remains at 10% with a lifetime limit of £10 million.
Inheritance Tax
The allowance remains at £325000 per person (£650000 for married couples and civil partners).
