Tax Rates & Related Information 2015/16

Tax Rates & Related Information 2015/16
This guide has been published to provide a snapshot of the key tax rates for 2015/16. Not all the information will be relevant to you and rates / thresholds can
change during the year so please check with A4C if you are unsure of anything or before making any financial decisions relating to your business.
Income Tax
What counts as taxable income?
-earnings from employment
-most pensions
-income from shares (dividends)
-earnings from self-employment
-interest on most savings
-rental income
Income Tax Rates
Basic rate
Higher rate
Additional rate
20%
40%
45%
£0-£31,785
£31,786-£150,000
Over £150,000
Dividend Tax Rates
Basic rate
Higher rate
Additional rate
10%
32.5%
37.5%
Employer’s Class 1 NI
Below the secondary threshold
Above secondary threshold
Allowance & Reliefs
If you are an employee or director you might be able to get tax relief for
business expenses you've paid for, such as travel and other expenses incurred
‘wholly, necessarily and exclusively’ in carrying out your business duties.
National Insurance Contributions
If you are employed you and your employer pay Class 1 NICs.
NIL
13.8%
Self Employed Rates
If you are self-employed you pay Class 2 and Class 4 National Insurance
contributions.
•
Class 2 NICs are paid at a flat rate of £2.80 pw (earnings over £5,965)
•
Class 4 NICs are paid at 9% on profits between £8,060 and £42,385,
and a further 2% on profits over that amount.
Capital Gains Tax
Individuals - basic rate
Individuals - higher / additional rate
Annual exempt amount for 2014/15
Income Tax Allowances
The amount of taxable income you're allowed to earn each year tax-free is
your personal allowance, in 2015/16 this is £10,600. The personal allowance
reduces by £1 for every £2 exceeding £100,000.
£156pw
£156+ pw
18%
28%
£11,100
*The tax rate used depends on the total of your taxable income, so you need to work this out first.
Corporation Tax Rates
For 2014/15 the main rate for Corporation Tax is 21%. The small profits rate
is 20% for qualifying companies not exceeding £300,000 in profits.
Value Added Tax
Standard rate
Reduced rate
Zero rate
VAT registration threshold
VAT deregistration threshold
20%
5%
0%
£82,000
£80,000
*Optional Flat Rate Scheme is available for small businesses. FRS % varies depending on industry.
Employee’s Class 1 NI
Below the primary threshold
(PT)
Between PT and upper earnings limit
Over upper earnings limit
£155pw
£155-£815pw
£815+ pw
NIL
12%
2%
*Zero rate applies between £112-£155 pw, protecting your contributory benefit entitlement.
For more information contact A4C on 01737 652 852 or email
[email protected].