Policy paper

Tax and tax credit rates and thresholds for 2014-15

Published 5 December 2013

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

1. Bands of taxable income and corresponding tax rates

	per cent of income / £ a year
	2013-14	2014-15
Basic rate	20%	20%
Higher rate	40%	40%
Additional rate	45%	45%
Starting rate for savings income*	10%	10%
Dividend ordinary rate	10%	10%
Dividend upper rate	32.5%	32.5%
Dividend additional rate	37.5%	37.5%
Trust rate	45%	45%
Starting rate limit (savings income)	£2,790	£2,880
Basic rate band	£0 - 32,010	£0 - 31,865
Higher rate band	£32,011 - 150,000	£31,866 - 150,000
Additional rate band	Over £150,000	Over £150,000

*From 2008-09 there is a 10 per cent starting rate for savings income only. If an individual’s taxable non-savings income exceeds the starting rate limit, then the 10 per cent starting rate for savings will not be available for savings income.

2. Income tax allowances

	£ a year
	2013-14	2014-15	Change
Personal Allowance
those born after 5 April 1948	9,440	10,000	560
those born between 6 April 1938 and 5 April 1948	10,500	10,500	-
those born before 6 April 1938	10,660	10,660	-
Income limit for personal allowance (*1)	100,000	100,000	-
Income limit for personal allowances (born before 6 April 1948) (*2)	26,100	27,000	900
Married couple’s allowance (*3)
maximum amount (*4)	7,915	8,165	250
minimum amount (*5)	3,040	3,140	100
Blind person’s allowance	2,160	2,230	70

*1 The personal allowance reduces where the individual’s income is above this limit by £1 for every £2 above the limit. This applies regardless of the individual’s date of birth.

*2 This allowance reduces where the individual’s income is above the income limit by £1 for every £2 above the income limit until it reaches the level of the personal allowance for someone born after 5 April 1948.

*3 Available to people born before 6 April 1935. Tax relief for this allowance is restricted to 10 per cent.

*4 This allowance reduces where the individual’s income is above the income limit by £1 for every £2 above the income limit until it reaches the minimum amount. Any reduction applies after any reduction to the individual’s personal allowance.

*5 This is also the maximum relief for maintenance payments where at least one of the parties is born before 6 April 1935.

3. National Insurance contribution thresholds

2013-14	£ per week	2014-15	£ per week
Weekly Lower Earnings Limit (LEL)	109	Weekly Lower Earnings Limit (LEL)	111
Weekly Primary Threshold (PT)	149	Weekly Primary Threshold (PT)	153
Weekly Secondary Threshold (ST)	148	Weekly Secondary Threshold (ST)	153
Upper Earnings/Profits Limit (UEL/UPL)	797 (41,450 per year)	Upper Earnings/Profits Limit (UEL/UPL)	805 (41,865 per year)
Small Earnings Exception (SEE)	5,725 (per year)	Small Earnings Exception (SEE)	5,885
Lower Profits Limit (LPL)	7755 (per year)	Lower Profits Limit (LPL)	7956 (per year)
N/A	-	Employment Allowance	2,000 (per year, per employer)

4. Class 1 National Insurance contribution rates 2014-15

Employee (primary)		Employer (secondary)
Earnings (*1)	NIC rate (*2)	Earnings (*1)	NIC rate (*3 )
£ a week	per cent	£ a week	per cent
Below £111 (LEL)	0	Below £153 (ST)	0
£111 – £153 (PT) (*4)	0	Above £153 (ST)	13.8
£153 - £805 (UEL)	12
Above £805	2

*1 The limits are defined as LEL - lower earnings limit; PT - primary threshold; ST - secondary threshold; and UEL - upper earnings limit.

*2 The contracted-out rebate for primary contributions is 1.4 per cent of earnings between the LEL and the upper accrual point (UAP) of £770 for contracted-out salary-related schemes (COSRS).

*3 The contracted-out rebate for secondary contributions is 3.4 per cent of earnings between the LEL and UAP for COSRS.

*4 No NICs are actually payable but a notional Class 1 NIC is deemed to have been paid in respect of earnings between LEL and PT to protect contributory benefit entitlement.

5. Self-employed National Insurance contribution rates 2014-15

	Self-employed NICs
Annual profits (*1) (£ a year)	Class 2 (*2) (£ a week)	Class 4 (per cent)
Below £5,885 (SEE) (*3)	0.00	0
£5,885 to £7,956 (LPL)	2.75	0
£7,956 to £41,865 (UPL)	2.75	9
Above £41,865	2.75	2

*1 The limits are defined as SEE - small earnings exception; LPL - lower profits limit and UPL - upper profits limit.

*2 Class 2 NICs are paid at a weekly flat rate of £2.75 by all self employed persons unless they have applied for a small earnings exception.

*3 The self-employed may apply for exception from paying Class 2 contributions if their earnings are less than, or expected to be less than the level of the small earnings exception.

6. Other NICs rates

	2013-14	2014-15
Married Women’s reduced rate (*1) (per cent)	5.85	5.85
Special Class 2 rate for share fishermen	£3.35 per week	£3.40 per week
Special Class 2 rate for volunteer development workers	£5.45 per week	£5.55 per week
Class 3 rate (*2)	£13.55 per week	£13.90 per week

*1 Married Women’s Reduced Rate is paid only by married women and certain widows with valid reduced rate elections.

*2 Class 3 NICs are paid by contributors to make the year a qualifying year for basic State Pension and Bereavement Benefit purposes.

7. Working and Child Credit Tax rates and thresholds

	£ a year
	2013-14	2014-15	Change
Working Tax Credit
Basic Element	1,920	1,940	20
Couple and lone parent element	1,970	1,990	20
30 hour element	790	800	10
Disabled worker element	2,855	2,935	80
Severe disability element	1,220	1,255	35
Childcare element
maximum eligible cost for one child	£175 per week	£175 per week	0
maximum eligible cost for two or more children	£300 per week	£300 per week	0
percent of eligible costs covered	70 per cent	70 per cent	0
Child tax credit
Family element	545	545	0
Child element	2,720	2,750	30
Disabled child element	3,015	3,100	85
Severely disabled child element	1,220	1,255	35
Income thresholds and withdrawal rates
Income threshold	6,420	6,420	0
Withdrawal rate (per cent)	41%	41%	0
First threshold for those entitled to Child Tax Credit only	15,910	16,010	100
Income rise disregard	5,000	5,000	0
Income fall disregard	2,500	2,500	0

8. Child Benefit and Guardian’s Allowance

	£ per week
	2013-14	2014-15	Change
Child Benefit
First Child	20.30	20.50	20 pence
Second and subsequent children	13.40	13.55	15 pence
Guardian’s Allowance	15.90	16.35	45 pence

9. Tax-free Savings Accounts

	£ a year
	2013-14	2014-15
Individual Savings Account (ISA) subscription limit
Overall limit	11,520	11,880
of which cash	5,760	5,940
of which stocks and shares	11,520	11,880
Junior ISA subscription limit	3,720	3,840
Child Trust Fund (CTF) subscription limit	3,720	3,840

10. Fuel Benefit Charge

Company Car Tax Fuel Benefit Charge	2013-14	2014-15
Car Fuel Benefit Charge Multiplier	£21,100	£21,700
Van Fuel Benefit Charge	£564	£581

11. Van Benefit Charge

Company Car Tax Van Benefit Charge	2013-14	2014-15
Van Benefit Charge	£3,000	£3,090