Tax and tax credit rates and thresholds for 2016-17
Published 25 November 2015
1. Bands of taxable income and corresponding tax rates
2015-16 | 2016-17 | |
---|---|---|
% of income/£ per year | ||
Basic rate | 20% | 20% |
Higher rate | 40% | 40% |
Additional rate | 45% | 45% |
Starting rate for savings income [footnote 1] | 0% | 0% |
Dividend ordinary rate – for dividends otherwise taxable at the basic rate (effective rate with tax credit)[footnote 2] | 10% (0%) | 7.5% |
Dividend upper rate – for dividends otherwise taxable at the higher rate (effective rate with tax credit) [footnote 2] | 32.5% (25%) | 32.5% |
Dividend additional rate – for dividends otherwise taxable at the additional rate (effective rate with tax credit) [footnote 2] | 37.5% (30.6%) | 38.1% |
Starting rate limit (savings income)[footnote 1] | £5,000 | £5,000 |
Basic rate band | £0-31,785 | £0-32,000 |
Higher rate band | £31,786-£150,000 | £32,001-150,000 |
Additional rate band | Over £150,000 | Over £150,000 |
2. Income tax allowances
2.1 Income tax allowances 2015-16
2015-16 | |
---|---|
% of income/£ per year | |
Personal allowance: | |
Born after 5 April 1938[footnote 3] | £10,600 |
Born before 5 April 1938[footnote 3] [footnote 4] | £10,660 |
Income limit for personal allowance[footnote 3] | £100,000 |
Income limit for personal allowances (born before 6 April 1938)[footnote 4] | £27,700 |
Marriage allowance: | |
Marriage allowance[footnote 5] [footnote 6] | £1,060 |
Married couple’s allowance for those born before 6 April 1935: | |
Maximum amount of married couple’s allowance [footnote 7] [footnote 8] | £8,355 |
Minimum amount of married couple’s allowance [footnote 7] [footnote 8] [footnote 9] | £3,220 |
Blind person’s allowance: | |
Blind person’s allowance | £2,290 |
2.2 Income tax allowances 2016-17
2016-17 | |
---|---|
% of income/£ per year | |
Personal allowance: | |
Personal Allowance[footnote 10] | £11,000 |
Income limit for personal allowance[footnote 10] | £100,000 |
Income limit for married couple’s allowance[footnote 11] | £27,700 |
Marriage allowance: | |
Marriage allowance[footnote 12] [footnote 13] | £1,100 |
Married couple’s allowance for those born before 6 April 1935: | |
Maximum amount of married couple’s allowance[footnote 14] [footnote 15] [footnote 16] | £8,355 |
Minimum amount of married couple’s allowance[footnote 14] [footnote 15] [footnote 16] [footnote 17] | £3,220 |
Blind person’s allowance: | |
Blind person’s allowance[footnote 16] | £2,290 |
Dividend allowance: | |
Dividend allowance[footnote 18] | £5,000 |
Personal savings allowance: | |
Personal savings allowance for basic rate taxpayers[footnote 19] | £1,000 |
Personal savings allowance for higher rate taxpayers[footnote 19] | £500 |
3. National Insurance contribution thresholds
2015-16 | 2016-17 | |
---|---|---|
£ per week | £ per week | |
Weekly Lower Earnings Limit (LEL)[footnote 20] | 112 | 112 |
Weekly Primary Threshold (PT)[footnote 20] | 155 | 155 |
Weekly Secondary Threshold (ST)[footnote 21] | 156 | 156 |
Upper Earnings Limit (UEL) | 815 | 827 |
Upper Profits Limit (UPL) | 42,385 per year | 43,000 per year |
Upper Secondary Threshold for U21’s | 815 | 827 |
Small Profits Threshold (SPT)[footnote 20] [footnote 22] | 5,965 per year | 5,965 per year |
Lower Profits Limit (LPL) | 8,060 per year | 8,060 per year |
Employment Allowance | 2,000 (per year, per employer) | 3,000 (per year, per employer) |
Apprentice Upper Secondary Threshold (AUST) for under 25s[footnote 23] | - | 827 |
4. Class 1 National Insurance contribution rates 2016-17
Employee (Primary) | |
---|---|
Earnings (£ a week)[footnote 24] | NIC rate (%) |
Below £112 (LEL) | 0 |
£112-155 (PT)[footnote 25] | 0 |
£155-827 (UEL) | 12 |
Above £827 | 2 |
Employer (Secondary) | |
---|---|
Earnings (£ a week)[footnote 24] | NIC rate (%) |
Below £156 (ST) | 0 |
Above £156 (ST) | 13.8 |
5. Self-employed National Insurance contribution rates 2016-17
Annual Profits (£ a year)[footnote 26] | Class 2 (£ a week)[footnote 27] | Class 4 (%) |
---|---|---|
Below £5,965 (SPT)[footnote 28] | 0.00 | 0 |
£5,965 to £8,060 (LPL) | 2.80 | 0 |
£8,060 to £43,000 (UPL) | 2.80 | 9 |
Above £43,000 | 2.80 | 2 |
6. Other NICs rates
2015-16 | 2016-17 | |
---|---|---|
Married Women’s reduced rate (%)[footnote 29] | 5.85% | 5.85% |
Special Class 2 rate for share fishermen[footnote 30] | £3.45 per week | £3.45 per week |
Special Class 2 rate for volunteer development workers[footnote 30] | £5.60 per week | £5.60 per week |
Class 3 rate[footnote 30] [footnote 31] | £14.10 per week | £14.10 per week |
7. Working and Child Tax Credit rates and thresholds
7.1 Working Tax Credit
2015-16 | 2016-17 | Change | |
---|---|---|---|
£ a year | £ a year | ||
Basic element | 1,960 | 1,960 | 0 |
Couple and lone parent element | 2,010 | 2,010 | 0 |
30 hour element | 810 | 810 | 0 |
Disabled worker element | 2,970 | 2,970 | 0 |
Severe disability element | 1,275 | 1,275 | 0 |
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 |
% of eligible costs covered (%) | 70% | 70% | 0 |
7.2 Child Tax Credit
2015-16 | 2016-17 | Change | |
---|---|---|---|
£ a year | £ a year | ||
Family element | 545 | 545 | 0 |
Child element | 2,780 | 2,780 | 0 |
Disabled child element | 3,140 | 3,140 | 0 |
Severely disabled child element | 1,275 | 1,275 | 0 |
7.3 Income thresholds and withdrawal rates
2015-16 | 2016-17 | Change | |
---|---|---|---|
£ a year | £ a year | ||
Income threshold | 6,420 | 6,420 | 0 |
Withdrawal rate (%) | 41 | 41 | 0 |
First threshold for those entitled to Child Tax Credit only | 16,105 | 16,105 | 0 |
Income rise disregard | 5,000 | 2,500 | 2,500 |
Income fall disregard | 2,500 | 2,500 | 0 |
8. Child Benefit and Guardian’s Allowance
2015-16 | 2016-17 | Change | |
---|---|---|---|
£ a week | £ a week | ||
Child Benefit | |||
First Child | 20.70 | 20.70 | 0 |
Second and subsequent children | 13.70 | 13.70 | 0 |
Guardian’s Allowance | 16.55 | 16.55 | 0 |
9. Tax-free Savings Account
2015-16 | 2016-17 | |
---|---|---|
£ a year | £ a year | |
Individual Savings Account (ISA) subscription limit | 15,240 | 15,240 |
Junior ISA subscription limit | 4,080 | 4,080 |
Child Trust Fund (CTF) subscription limit | 4,080 | 4,080 |
10. Fuel benefit charge
2015-16 | 2016-17 | |
---|---|---|
Car fuel benefit charge multiplier | 22,100 | 22,200 |
Van fuel benefit charge | 594 | 598 |
11. Van benefit charge
2015-16 | 2016-17 | |
---|---|---|
Van benefit charge | 3,150 | 3,170 |
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From 2008-09 there is a starting rate for savings income only. If an individual’s taxable non-savings income exceeds the starting rate limit, then the starting rate for savings will not be available for savings income. ↩ ↩2
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From April 2016 the dividend tax credit will be abolished and replaced with a new £5,000 tax-free Dividend Allowance. ↩ ↩2 ↩3
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This allowance is subject to the £100,000 income limit which applies regardless of the individual’s date of birth. The individual’s personal allowance is reduced where their income is above this limit. The allowance is reduced by £1 for every £2 above the limit. ↩ ↩2 ↩3
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This allowance is subject to the £27,700 income limit. The individual’s personal allowance is reduced where their income is above this limit. The allowance is reduced by £1 for every £2 above the limit but is not reduced below £10,600 (unless the £100,000 income limit applies – see note 3). ↩ ↩2
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This transferable allowance is available to married couples and civil partners who are not in receipt of married couple’s allowance. A spouse or civil partner who is not liable to income tax; or not liable at the higher or additional rate, can transfer this amount of their personal allowance to their spouse or civil partner. The recipient must not be liable to income tax at the higher or additional rate. ↩
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The relief for this allowance is given at 20%. ↩
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This allowance is subject to the £27,700 income limit. The individual’s married couple’s allowance is reduced by £1 for every £2 above the limit. That reduction only applies after any reduction to their personal allowance (see note 2). The individual’s married couple’s allowance is never reduced below the minimum amount. ↩ ↩2
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This is the maximum relief for maintenance payments where at least one of the parties was born before 6 April 1935. ↩
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From 2016-17 onwards, all individuals will be entitled to the same personal allowance, regardless of the individuals’ date of birth. This allowance is subject to the £100,000 income limit which applies regardless of the individual’s date of birth. The individual’s personal allowance is reduced where their income is above this limit. The allowance is reduced by £1 for every £2 above the limit. ↩ ↩2
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This allowance is subject to the £27,700 income limit. The individual’s personal allowance is reduced where their income is above this limit. The allowance is reduced by £1 for every £2 above the limit but is not reduced below £10,600 (unless the £100,000 income limit applies – see note 10). ↩
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This transferable allowance is available to married couples and civil partners who are not in receipt of married couple’s allowance. A spouse or civil partner who is not liable to income tax; or not liable at the higher or additional rate, can transfer this amount of their personal allowance to their spouse or civil partner. The recipient must not be liable to income tax at the higher or additional rate. ↩
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The relief for this allowance is given at 20%. ↩
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This allowance is subject to the £27,700 income limit. The individual’s married couple’s allowance is reduced by £1 for every £2 above the limit. That reduction only applies after any reduction to their personal allowance (see note 11). The individual’s married couple’s allowance is never reduced below the minimum amount. ↩ ↩2
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These amounts are subject to indexation – the annual increase in CPI – and have been frozen for 2016-17 at 2015-16 levels in order to prevent any cash loss to individuals as a result of negative growth in CPI. ↩ ↩2 ↩3
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This is the maximum relief for maintenance payments where at least one of the parties was born before 6 April 1935. ↩
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From April 2016, the new Dividend Allowance means that individuals will not have to pay tax on the first £5,000 of dividend income they receive. ↩
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From April 2016, the new Personal Savings Allowance means that basic rate taxpayers will not have to pay tax on the first £1,000 of savings income they receive and higher rate taxpayers will not have tax to pay on their first £500 of savings income. ↩ ↩2
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The Weekly Secondary Threshold is uprated by CPI. ↩
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The Small Profits Threshold replaced the Small Earnings Exception on 6 April 2015. ↩
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The Upper Secondary Threshold for Apprentices under 25 comes into effect on 6 April 2016. ↩
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The limits are defined as LEL - lower earnings limit; PT - primary threshold; ST - secondary threshold; and UEL – upper earnings limit. ↩ ↩2
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No National Insurance contributions (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. ↩
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The limits are defined as SPT – small profits threshold; LPL – lower profits limit and UPL – upper profits limit. ↩
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Class 2 NICs are paid at a weekly flat rate of £2.80 by all self-employed persons unless they have profits below the small profits threshold. The rate is uprated by CPI. ↩
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The self-employed may pay Class 2 contributions if their profits are below the SPT. ↩
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Married Women’s Reduced Rate is paid only by married women and certain widows with valid reduced rate elections on earnings between PT and UEL and at 2% on earnings that exceed UEL. ↩
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Class 3 NICs can be paid by contributors to make the year a qualifying year for basic State Pension, new State Pension and Bereavement Benefit purposes. ↩