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.


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





Standard rate18%18%
Higher 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

210 and above37
  • 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
All profits20

Year to 31.3.15

Profits band
0 – 300,00020*
300,001 – 1,500,00021.25*
Over 1,500,00021*
Standard fraction1/400*

*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



Band £Rate %Band £Rate %
0 – 5,0000*0 – 2,88010*
0 – 31,78520**0 – 31,86520**
31,786 – 150,00040***31,866 – 150,00040***
Over 150,00045****Over 150,00045****

*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



Personal allowance
 – born after 5 April 194810,600**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.)8,3558,165
 – min. amount3,2203,140
*Age allowance income limit(Reduce age allowance by £1 for every £2 of adjusted net income over £27,700 (£27,000).)27,70027,000
Blind person’s allowance2,2902,230
New Individual Savings Accounts



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



Chargeable transfers
2015/16 and 2014/15

NilNil0 – £325,000*
40%20%Over £325,000*

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


Annual exemption£3,000Marriage– 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 death0-33-44-55-66-7
% of death charge10080604020
Statutory Pay Rates

Weekly benefit



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 weeks90% 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 miles45p
Over 10,000 miles25p

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

Earnings per week%Earnings per week**%
Up to £155Nil*Up to £156Nil
£155.01 – £81512Over £15613.8**
Over £8152
*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


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

0Up to 145,000Up to 150,0000
2145,001 – 250,000150,001 – 350,0003
5250,001 – 325,000Over 350,0004.5
10325,001 – 750,000
12Over 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

00 – 125,0000 – 150,0000
2125,001 – 250,000150,001 – 250,0001
5250,001 – 925,000250,001 – 500,0003
10925,001 – 1,500,000Over 500,0004
121,500,001 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 rate20%
Reduced rate5%
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


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.

Free initial consultation