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Tax Rates and Allowances 2015/16

Many of the tax rates and allowances are fundamental to our business and personal lives and the main ones for the 2015/16 tax year are summarised here. We are sure that you will find it a useful point of reference throughout the coming tax year but if you have any questions please do not hestitate to contact us

Please navigate our tax rates 2015/16 summary by using the tabs below.

Capital Allowances

Plant and machinery – Annual Investment Allowance (AIA)

The AIA gives a 100% write-off on most types of plant and machinery costs, including integral features and long life assets but not cars, of up to £500,000 p.a. for expenditure incurred on or after 6 April 2014 (1 April 2014 for companies). In his speech on Wednesday 8 July 2015, the Chancellor announced the level of the maximum AIA will now be permanently at £200,000 for all qualifying investment in plant and machinery made on or after 1 January 2016. Special rules apply to accounting periods straddling these dates.

Any costs over the AIA fall into the normal capital allowance pools below. The AIA may need to be shared between certain businesses under common ownership.

Other plant and machinery allowances

The annual rate of allowance is 18%. An 8% rate applies to expenditure incurred on integral features and on long life assets.

A 100% first year allowance may be available on certain energy efficient plant and cars, including expenditure incurred on new and unused zero emission goods vehicles.

Cars

For expenditure incurred on cars, costs are generally allocated to one of the two plant and machinery pools. Cars with CO2 emissions not exceeding 130gm/km receive an 18% allowance p.a. Cars with CO2emissions over 130gm/km receive an 8% allowance p.a.

Capital Gains Tax

2015/16

£

2014/15

£

Individuals
Exemption 11,100 11,000
Standard rate 18% 18%
Higher rate* 28% 28%
Trusts
Exemption 5,550 5,500
Rate 28% 28%
*For higher and additional rate taxpayers.
Entrepreneurs’ Relief
The first £10m of qualifying gains are charged at 10%. Gains in excess of the limit are charged at the rates detailed above.
Car, Van and Fuel Benefits

Company cars 2015/16

CO2 emissions (gm/km)

(round down to nearest 5gm/km)

% of car’s list price taxed

0-50* 5
51-75* 9
76-94* 13
95 14
100 15
105 16
110 17
115 18
120 19
125 20
130 21
135 22
140 23
145 24
150 25
155 26
160 27
165 28
170 29
175 30
180 31
185 32
190 33
195 34
200 35
205 36
210 and above 37
  • For diesel cars add a 3% supplement but maximum still 37%.
  • For cars registered before 1 January 1998 the charge is based on engine size.
  • The list price includes accessories and is not subject to an upper limit.
  • The list price is reduced for capital contributions made by the employee up to £5,000.
  • Special rules may apply to cars provided for disabled employees.

*Rounding down to the nearest 5gm/km does not apply.

Car fuel benefit 2015/16

£22,100 x ‘appropriate percentage’ *

*Percentage used to calculate the taxable benefit of the car for which the fuel is provided.
The charge does not apply to certain environmentally friendly cars.
The charge is proportionately reduced if provision of private fuel ceases part way through the year. The fuel benefit is reduced to nil only if the employee pays for all private fuel.

Van benefit per vehicle 2015/16

  • Van benefit £3,150
  • Fuel benefit £594

The charges do not apply to vans if a ‘restricted private use condition’ is met throughout the year.
A reduced charge may be due if the van cannot in any circumstances emit CO2 by being driven.

Corporation Tax

Year to 31.3.16

Profits band
£
Rate
%
All profits 20

Year to 31.3.15

Profits band
£
Rate
%
0 – 300,000 20*
300,001 – 1,500,000 21.25*
Over 1,500,000 21*
Standard fraction 1/400*

*The profits limits are reduced for accounting periods of less than 12 months and for a company with associated companies.
Different rates apply for ring-fenced (broadly oil industry) profit.

Income Tax Rates

2015/16

2014/15

Band £ Rate % Band £ Rate %
0 – 5,000 0* 0 – 2,880 10*
0 – 31,785 20** 0 – 31,865 20**
31,786 – 150,000 40*** 31,866 – 150,000 40***
Over 150,000 45**** Over 150,000 45****

*Only applicable to savings income. The rate is not available if taxable non-savings income exceeds £5,000 (£2,880).
** Except dividends (10%).
*** Except dividends (32.5%).
**** Except dividends (37.5%).
Other income taxed first, then savings income and finally dividends.

Income Tax Reliefs

2015/16
£

2014/15
£

Personal allowance
 – born after 5 April 1948 10,600** 10,000
 – born after 5 April 1938 and before 6 April 1948* 10,600** 10,500
 – born before 6 April 1938* 10,660** 10,660
(Reduce personal allowance by £1 for every £2 of adjusted net income over £100,000.)**£1,060 may be transferable between certain spouses where neither pay tax above the basic rate.
Married couple’s allowance (relief at 10%)*(Either partner 75 or over and born before 6 April 1935.) 8,355 8,165
 – min. amount 3,220 3,140
*Age allowance income limit(Reduce age allowance by £1 for every £2 of adjusted net income over £27,700 (£27,000).) 27,700 27,000
Blind person’s allowance 2,290 2,230
New Individual Savings Accounts

2015/16

2014/15

From 1.7.14
to 5.4.15

Overall investment limit £15,240 £15,000*

*Special rules apply if investments were made before 1.7.14. Investments for 2014/15 cannot exceed £15,000 in total.

Inheritance Tax

Death
rate

Lifetime
rate

Chargeable transfers
2015/16 and 2014/15

Nil Nil 0 – £325,000*
40% 20% Over £325,000*

*Potentially increased for surviving spouses or civil partners who die on or after 9 October 2007.

Reliefs

Annual exemption £3,000 Marriage – parent £5,000
Small gifts £250 – grandparent £2,500
– bride/groom £2,500
– other £1,000

 

Reduced charge on gifts within seven years of death

Years before death 0-3 3-4 4-5 5-6 6-7
% of death charge 100 80 60 40 20
Statutory Pay Rates

Weekly benefit

2015/16

2014/15

Basic retirement pension – single person £115.95 £113.10
– married couple £185.45 £180.90
Statutory pay rates – average weekly earnings £112 (£111) or over
Statutory Sick Pay £88.45 £87.55
Statutory Maternity Pay
– First six weeks 90% of weekly earnings
– Next 33 weeks £139.58* £138.18*
Statutory Paternity Pay – two weeks £139.58* £138.18*
Statutory Adoption Pay – 39 weeks £139.58* £138.18*
* Or 90% of weekly earnings if lower.
Mileage Allowance Payments

2015/16 and 2014/15

Cars and vans

Rate per mile

Up to 10,000 miles 45p
Over 10,000 miles 25p
Bicycles 20p
Motorcycles 24p

These rates represent the maximum tax free mileage allowances for employees using their own vehicles for business. Any excess is taxable. If the employee receives less than the statutory rate, tax relief can be claimed on the difference.

National Insurance

2015/16 Class 1 (employed) contracted in rates

Employee Employer**
Earnings per week % Earnings per week** %
Up to £155 Nil* Up to £156 Nil
£155.01 – £815 12 Over £156 13.8**
Over £815 2
*Entitlement to contribution-based benefits retained for earnings between £112 and £155 per week.**The rate is 0% in relation to employees under 21 on earnings up to £815 per week.

 

Class 1A (employers) 13.8% on employee taxable benefits
Class 1B (employers) 13.8% on PAYE Settlement Agreements
Class 2 (self-employed) flat rate per week £2.80
small profits threshold £5,965 p.a.
Class 3 (voluntary) flat rate per week £14.10
Class 4 (self-employed) 9% on profits between £8,060 and £42,385 plus 2% on profits over £42,385
Pensions Premiums

2015/16

Tax relief available for personal contributions: higher of £3,600 (gross) or 100% of relevant earnings. Any contributions in excess of £40,000, whether personal or by the employer, may be subject to income tax on the individual.

The limit may be reduced to £10,000 once money purchase pensions are accessed.

Where the £40,000 limit is not fully used it may be possible to carry the unused amount forward for three years.

Employers will obtain tax relief on employer contributions if they are paid and made ‘wholly and exclusively’. Tax relief for large contributions may be spread over several years.

Land and Buildings Transaction Tax

Land and buildings in Scotland

Rate% Residential£ Non-residential£ Rate%
0 Up to 145,000 Up to 150,000 0
2 145,001 – 250,000 150,001 – 350,000 3
5 250,001 – 325,000 Over 350,000 4.5
10 325,001 – 750,000
12 Over 750,000

The rates apply to the portion of the total value which falls within each band in respect of transactions with an effective date on or after 1 April 2015.

Stamp Duty and Stamp Duty Land Tax

Land and buildings in England, Wales and N. Ireland

Rate
%
Residential*
£
Non-residential**
£
Rate
%
0 0 – 125,000 0 – 150,000 0
2 125,001 – 250,000 150,001 – 250,000 1
5 250,001 – 925,000 250,001 – 500,000 3
10 925,001 – 1,500,000 Over 500,000 4
12 1,500,001 and over

*Payable on consideration which falls in each bracket.
**Payable on total consideration once limit is breached.

SDLT is charged at 15% on interests in residential dwellings costing more than £500,000 purchased by certain non-natural persons for acquisitions with an effective date on or after 20 March 2014.

Shares and securities – rate 0.5%.

Tax Relief for Individuals

2015/16 and 2014/15

Enterprise Investment Scheme (EIS)

Relief on investments in certain unquoted trading companies up to £1m p.a.:

  • Income tax relief at 30%.
  • Capital gains exemption on disposal.

Unlimited amounts of capital gains from the disposal of other assets may be able to be deferred by making an EIS investment.

Seed Enterprise Investment Scheme (SEIS)

Relief on investments in certain unquoted trading companies up to £100,000 p.a.:

  • Income tax relief at 50%.
  • Capital gains exemption on disposal.

Capital gains from the disposal of other assets may be exempt up to £50,000 p.a. by making an SEIS investment.

Venture Capital Trusts (VCTs)

Relief on investments in certain quoted companies up to £200,000 p.a.:

  • Income tax relief at 30%.
  • Capital gains exemption on disposal.

Dividends received from VCTs may be exempt from income tax.

Social Investment Relief (SIR)

Relief on investments in certain social enterprises (including charities)up to £1m p.a.:

  • Income tax relief at 30%.
  • Capital gains exemption on disposal.

Capital gains from the disposal of other assets may be able to be deferred by making an SIR investment up to £1m p.a.

(All reliefs subject to detailed conditions being met.)

Value Added Tax
Standard rate 20%
Reduced rate 5%
Annual Registration Limit – from 1.4.15 (1.4.14 – 31.3.15 £81,000) £82,000
Annual Deregistration Limit – from 1.4.15 (1.4.14 – 31.3.15 £79,000) £80,000

Disclaimer

This publication is published for the information of clients. It provides only an overview of the regulations in force at the date of publication and no action should be taken without consulting the detailed legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this publication can be accepted by the authors or the firm.

For more information

For more information on anything discussed in this article or if you would like some tax planning advice please contact your usual Hawsons contact. Alternatively, please contact your nearest office to arrange your free initial meeting.

We will also keep you updated with any additional developments, so please sign-up for our tax news.

You can see our Budget 2015 summary here.

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