Tax Rates and Allowances for 2015-2016

Income Tax

A tax year for individuals runs from the 6st of April to the 5st of April of the following year. For
example, 6st April 2015 5th April 2016. The current tax year is 2015-2016.

Personal Allowance 2015-16 Tax Year Income Limit

Those born after the 6th of April 1938 10,600 100,000
Those born before the 6th of April 1938 10,660 27,700

The current personal allowance is 10,600. It will increase to 10,800 for the 2016-2017 tax year.

For incomes over 100,000, the value of the personal allowance is removed by 1 for every 2 over
the threshold. For incomes between 27,700 and 100,000, the age-related Personal Allowance is
reduced by half of the amount 1 for every 2 over the 27,700 limit, until the basic allowance is
reached

Taxable Bands

Income is taxed at various rates. The current rates and thresholds are as follows:

Basic Rate 20% 0-31,785

Higher Rate 40% 31,786-150,000
Additional Rate 45% 150,000+

Savings income has a rate of 0% and a threshold of 0-5,000.

Married Couples Allowance - 3,220 - 8,355; income limit - 27,700.

Marriage Allowance - 1,060.

Blind Persons Allowance - 2,290.

Maintenance Payments relief can reduce a persons tax bill by the lower of the following two
amounts:

10% of 3,220 (322) - this will apply where the taxpayer makes maintenance payments of
3,220 or more a year; or
10% of the amount the taxpayer has actually paid - this will apply where they make
maintenance payments of less than 3,220.

Dividends

The current rates and thresholds for tax on dividend income are:

Basic Rate 10% Up to 31,785

Higher Rate 32.5% 31,786 -150,000
Additional Rate 37.5% 150,000
Corporation Tax

A tax year for corporations runs from the 1st of April to the 31st of March of the following year. For
example, 1st April 2015 31st March 2016. The current tax year is 2015-2016.

All companies pay Corporation Tax at the same rate.

The current rate is 20%.

Capital Gains Tax

There are two rates of Capital Gains Tax for individuals. The current rates are:

Basic Rate: 18%

Higher Rate: 28%

The rate for trustees and personal representatives is 28%

The Annual Exemption Amounts for the current tax year are:

11,100 for each individual and personal representatives

5,550 for most trustees

Inheritance Tax

The current threshold for inheritance tax is 325,000. Estates that fall under this value will be in the
nil rate band. The current rate of inheritance tax is 40%.

The rate is 36% (since the 6th of April 2012) when 10% or more of the net estate is left to a charity or
registered community amateur sports club (CASC).

Value Added Tax (VAT)

There are three rates of VAT, depending on the goods or services the business provides. The rates are:

standard 20%
reduced 5%
zero 0%

Registration for VAT

The registration threshold is 82,000

The de-registration threshold is 80,000