Income Tax Rates and Allowances
Income Tax Rates and Allowances (Table A)
|Blind Person's Allowance||2,290||2,290|
|Allowed only at 10%|
|Married Couple's Allowance (born before 6.4.35)**||8,355||8,355|
|Income limit for age-related allowances||27,700||27,700|
|Dividend and Savings Allowances|
|Dividend Tax Allowance (DTA) §||5,000||N/A|
|Personal Savings Allowance (basic rate taxpayer) §||1,000||N/A|
|Personal Savings Allowance (higher rate taxpayer) §||500||N/A|
*Personal Allowance (PA) will be withdrawn at £1 for every £2 by which 'adjusted income' exceeds £100,000. There will therefore be no allowance given if adjusted income is £122,000 or more (2015/16: £121,200).
†Up to 10% of the PA (2016/17: £1,100; 2015/16: £1,060) can be transferred to a spouse or civil partner who is no more than a basic rate taxpayer.
**Married Couple's Allowance is reduced by £1 for every £2 by which adjusted income exceeds the income limit, down to a minimum of £3,220.
§The DTA taxes the first £5,000 of dividend income at nil rather than the rate that would otherwise apply – see rates below. The Personal Savings Allowance (PSA) operates as a nil rate band for interest income.
|Additional||over 150,000||over 150,000|
|Rates differ for General, Savings and Dividend income within each band:|
General income (salary, pensions, business profits, rent) uses Personal Allowance, basic rate and higher rate bands before savings income (interest). To the extent that savings income falls in the first £5,000 of the basic rate band, it is taxed at nil rather than 20%. The PSA (see above) will tax interest at nil where it would otherwise be taxable at 20% or 40%.
Dividends are taxed as the 'top slice' of income. For 2016/17, the dividend received is taxable. In 2015/16, the dividend received was grossed up by 100/90 to determine the taxable dividend. A non-repayable tax credit equal to 10% of the taxable amount was then deductible against the income tax liability on the taxable dividend.
High Income Child Benefit Charge (HICBC)
1% of child benefit for each £100 of adjusted net income between £50,000 and £60,000.
|Remittance basis charge||2016/17||2015/16|
|For non-UK domiciled individuals who have been
UK resident in at least
|7 of the preceding 9 tax years||£30,000||£30,000|
|12 of the preceding 14 tax years||60,000||50,000|
|17 of the preceding 20 tax years||90,000||N/A|
Registered Pensions (Table B)
|Lifetime allowance (LA)||£1.00m||£1.25m|
|Annual allowance (AA)*||40,000||40,000|
|LA charge if excess drawn as||cash 55%/income 25%|
|AA charge on excess inputs||20%-45%|
Annual relievable pension inputs are the higher of earnings (capped at AA) or £3,600.
*For 2016/17 the AA is usually reduced by £1 for every £2 by which relevant income exceeds £150,000, down to a minimum AA of £10,000.
Car and Fuel Benefits (Table C)
Taxable benefit is chargeable value multiplied by chargeable percentage.
Chargeable value:Initial list price of car (including most accessories), reduced by any capital contribution (maximum £5,000) by employee when the car is first made available.
|CO2 emissions (g/km)||Petrol||Diesel|
|Above 94||Add 1% for every 5g/km|
|Above 200 (petrol)/ 185 (diesel)||37% maximum|
Where employer provides fuel for private motoring in an employer-owned car, CO2-based percentage from above table multiplied by £22,200 (2015/16 £22,100).
Employee contributions for fuel do not reduce taxable figure unless all private fuel is paid for by the employee (in which case there is no benefit charge).