Rates & Allowances

Find out the latest information on the various tax bands.

Rates 2015/16 2016/17 2017/18
Basic rate of 20% on income up to £31,785  £32,000  £33,500
Higher rate of 40% on income  £31,786 to £150,000 £32,001 to £150,000 £33,501 to £150,000
Additional rate on income over £150,000 45%  45%  45% 
Starting rate of 0% limited for savings up to  £5,000  £5,000  £5,000 
Dividends: Basic rate taxpayers  10%  7.5%  7.5% 
Higher rate taxpayers  32.5%  32.5%  32.5% 
Additional rate taxpayers  37.5%  38.1%  38.1% 
Trust rate  45%  45%  45% 
Trust rate on first £1,000[2] 20%  20%  20% 
Trust rate on dividends  37.5%  38.1%  38.1%

Income Tax Rates & Taxable Bands

Rate 2010-11 2011-12 2012-13
Starting rate for savings: 10%* £0-£2,440 £0-£2,560 £0-£2,710
Basic rate: 20% £0-£37,400 £0-£35,000 £0-£34,370
Higher rate: 40% £37,401-£150,000 £35,001-£150,000 £34,371-£150,000
Additional rate: 50% Over £150,000 Over £150,000 Over £150,000

*The 10 per cent starting rate applies to savings income only. If, after deducting your Personal Allowance from your total income liable to Income Tax, your non-savings income is above this limit then the 10 per cent starting rate for savings will not apply. Non-savings income includes income from employment, profits from self-employment, pensions, income from property and taxable benefits.

National Insurance Rates

Are you self employed?

2010-11 2011-12 2012-13
Class 2 rate WEEKLY £2.40 £2.50 £2.65
Class 2 small earnings exception £5,075 per year £5,315 per year £5,595 per year
Class 4 lower profits limit £5,715 per year £7,225 per year £7,605 per year
Class 4 upper profits limit £43,875 per year £42,475 per year £42,475 per year
Class 4 rate between lower profits limit and upper profits limit 8% 9% 9%
Class 4 rate above upper profits limit 1% 2% 2%

Are You Employed?

£ per week 2010-11 2011-12 2012-13
Lower earnings limit, primary Class 1 £97 £102 £107
Upper earnings limit, primary Class 1 £844 £817 £817
Employees’ primary Class 1 rate between primary threshold and upper earnings limit 11% 12% 12%
Employees’ primary Class 1 rate above upper earnings limit 1% 2% 2%
Class 1A rate on employer provided benefits (1) 12.8% 13.8% 13.8%

Corporation Tax Rates

Rates for financial years starting on 1 April – If your financial year does not begin on 1 April, call us to find out how this would affect your business.

Rate 2010 2011 2012 2013
Small profits rate* 21%* 20%* 20%*  
Small profits rate can be claimed by qualifying companies with profits at a rate not exceeding £300,000 £300,000 £300,000  
Marginal Relief Lower Limit £300,000 £300,000 £300,000  
Marginal Relief Upper Limit £1,500,000 £1,500,000 £1,500,000  
Standard fraction 7/400 3/200 1/100  
Main rate of Corporation Tax* 28%* 26%* 24%* 23%*
Special rate for unit trusts and open-ended investment companies 20% 20% 20%  

Main Rate of Corporation Tax

The main rate of Corporation Tax applies when profits are at a rate exceeding £1,500,000, or where there is no claim to another rate, or where another rate does not apply.

Capital Gains Tax rates and annual tax-free allowances

Each tax year nearly everyone who is liable to Capital Gains Tax gets an annual tax-free allowance – known as the ‘Annual Exempt Amount’. You only pay Capital Gains Tax if your overall gains for the tax year (after deducting any losses and applying any reliefs) are above this amount.

Annual Exempt Amounts

Tax rates – individuals 2015/16 2016/17
Standard rate  18%  10% 
Higher rate  28%  20% 
Standard rate for gains on residential property and carried interest N/A  18% 
Higher rate for gains on residential property and carried interest N/A  28% 
Trust rate  28%  20% 
Trust rate for gains on residential property  N/A  28% 
Exemptions 2015/16 2016/17
Individuals, PRs and some trustees £11,100  £11,100
Most trustees  £5,500  £5,550
Chattels exemptions: proceeds up to[1] £6,000  £6,000

Notes: [1] For consideration over £6,000 the chargeable gain is limited to five-thirds of excess over £6,000

Entrepreneurs’ relief 2015/16 2016/17 2017/18
Relief rate  10%  10%  TBA
Lifetime limit  £10m  £10m  TBA
Relief rate for long term external investors N/A  10%  10% 
Lifetime limit for long term external investors N/A  £10m  £10m 

Rates For Capital Gains Tax – 2011-12

The following Capital Gains Tax rates apply:

  • 18 per cent and 28 per cent tax rates for individuals (the tax rate you use depends on the total amount of your taxable income, so you need to work this out first )
  • 28 per cent for trustees or for personal representatives of someone who has died
  • 10 per cent for gains qualifying for Entrepreneurs’ Relief

If you’re not sure how to work out your taxable income, Call Livingstones and we can help you calculate the most effective way to use the exemptions in your favour.

Inheritance Tax Thresholds

The Inheritance Tax threshold (or ‘nil rate band’) is the amount up to which an estate will have no Inheritance Tax to pay.

If the estate – including any assets held in trust and gifts made within seven years of death – is more than the threshold, Inheritance Tax will be due at 40 per cent on the amount over the nil rate band. From 6 April 2012 people who leave 10 per cent or more of their net estate to charity can choose to pay a reduced rate of Inheritance Tax of 36 per cent.

From To Threshold/nil rate band
6 April 2009 5 April 2015 £325,000

Stamp Duty Land Tax Rates & Thresholds

Stamp Duty Land Tax (SDLT) is charged on land and property transactions in the UK. The tax is charged at different rates and has different thresholds for different types of property and different values of transaction.

Residential land or property SDLT rates and thresholds

Purchase price/lease premium or transfer value SDLT rate
Up to £125,000 Zero
Over £125,000 to £250,000 1%
Over £250,000 to £500,000 3%
Over £500,000 to £1 million 4%
Over £1 million to £2 million 5%
Over £2 million from 22 March 2012 7%
Over £2 million (purchased by certain persons including corporate bodies) from 21 March 2012 15%

Working & Child Tax Credits Rates

Working Tax Credit

£ per year (unless stated) 2012-13   2011-12
Basic element £1,920   £1,920
Couple and lone parent element £1,950   £1,950
30 hour element £790   £790
Disabled worker element £2,790   £2,650
Severe disability element £1,195   £1,130
50+ Return to work payment (16-29 hours) Removed   £1,365
50+ Return to work payment (30+ hours) Removed   £2,030

Childcare element of the Working Tax Credit

£ per year (unless stated) 2012-13   2011-12
Maximum eligible cost for one child £175 per week   £175 per week
Maximum eligible cost for two or more children £300 per week   £300 per week
Percentage of eligible costs covered 70%   70%

Child Tax Credit

£ per year (unless stated) 2012-13   2011-12
Family element £545   £545
Child element £2,690   £2,555
Disabled child element £2,950   £2,800
Severely disabled child element £1,190   £1,130

Income Thresholds & Withdrawal Rates

£ per year (unless stated) 2012-13   2011-12
First income threshold £6,420   £6,420
First withdrawal rate 41%   41%
Second income threshold Withdrawn   £40,000
Second withdrawal rate 41%   41%
First threshold for those entitled to Child Tax Credit only £15,860   £15,860
Income disregard £10,000   £10,000
Income fall disregard £2,500   N/A

High income child benefit charge

Child benefit is receivable by a person responsible for each child until they reach 16, or 20 if they stay in education or training. If the person (or their spouse or partner) has adjusted net income above £50,000, the person with the highest income has an income tax charge. If their adjusted net income is more than £60,000 a year, the tax charge equals the child benefit received and the charge is 1% of benefit for each £100 of income between £50,000 and £60,000. High income child benefit charge applies from January 2013.

Looking to find out more?

We consistently monitor our clients business to make sure they are on the right track. We want every business to flourish, therefore, you hear from Livingstones Accoutants more than just once a year.

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