Tax rates and allowances - VICKY PLATT Chartered Accountant and

Vicky Platt MA FCA CTA
Chartered Accountant and Chartered Tax Adviser
SUMMARY FOR TAX YEAR 2014-2015 updated by the 2014 December Autumn Statement. The figures for 2015-2016 are in bold;
2014-2015 figures are not in bold (and often in brackets).
RATES AND TAX ALLOWANCES FROM 6 APRIL 2014
2014/2015 (£)
The Income Tax Rate bands and allowances are:
Notes
2015/2016
5,000
2,880
0% (2014-15 10%) starting rate (restricted) on income up to
1
20% basic rate (if non savings taxable income exceeds the starting rate
band 10% is not available) on income up to
40% higher rate on income up to (dividends 32.5%)
2
2
Withdrawal of personal allowance, which is reduced by £1 for every £2
income over £100,000, effective tax rate 60%
45% (45%) additional rate on the excess over [dividends 37.5% (37.5%)]
Capital gains at individual's top rate of tax
Capital gains tax annual exemption for individuals and executors/most
other trusts
Executors: Mainstream / Discretionary trusts: Basic rate band, no
additional tax due
Other income/dividends
Personal allowance (born after 5 April 1948) progressively withdrawn
on income over £100,000 (see above)
Personal allowance (born 6 April 1938 – 5 April 1948)
Personal allowance (born before 6 April 1938)
Married couple allowance (if one born before 6 April 1935) Relief at 10%
Minimum married couple’s allowance, one partner must be born before
6 April 1935 (Relief at 10%)
'Rent a room' relief applies to part let main residence
3
3
3
31,785
31,865
150,000
150,000
100,000 –
121,200
100,000 –
120,000
150,000
28% /18%
150,000
28% / 18%
£11,100/£5,550
£11,000/£5,500
£1,000
45% / 37.5%
£1,000
45% / 37.5%
10,600
10,000
10,600
10,500
10,600
10,660
8,355
8,165
3,220
4,250
3,140
4,250
1,050
Transferable tax allowance
4
Notes
1) Savings income, up to £5,000 (£2,880), primarily bank and building society interest, is taxed at 0% (10%), provided non
savings taxable income does not exceed £5,000.
2) Basic rate savings income will continue to be taxed at 20% with dividends at 10%. Tax on taxable income above £31,785
(£31,865) 40% for savings income and 32.5% for dividends. Non savings income is taxed as the first slice of income.
Dividends are taxed as the top slice of income.
3) The age allowance over the personal allowance is reduced by £1 for every £2 over the income limit of £27,700 (£27,000)
to the standard personal allowance. This will reduce further if income is over £100,000 per annum.
4) Available to spouses/civil partners born after 5 April 1935 (for married couples civil partnership). Transferable if neither
partner is a higher rate tax payer.
NATIONAL INSURANCE CONTRIBUTIONS (NIC)
Lower earnings limit ─ weekly pay over this gains state pension credits
Earnings threshold ─ weekly employers’ / employees’ contributions
Upper earnings limit ─ employees’ and self-employed, annual
Contribution threshold ─ Class 4, self-employed, annual
Contribution rate ─ primary threshold employee to upper limit
Rate on earnings above upper limit ─ employees and self-employed
Contribution rate ─ employer, secondary threshold, no upper limit
Class 1A & B on benefits ─ employers’, no upper limit
Employment allowance available to smaller employees against Employers’ NI
* except for under 21s. Upper limit £815 per week.
2015/16
£112
£156/155
£42,385
£8,060
12%
2%
13.8%
13.8%
£2,000
2014/15
£111
£153/£153
£41,865
£7,956
12%
2%
13.8%
13.8%
£2,000
Self Employed: register within three months of starting self employment
Class 4 NI is payable on 9% of profits between £8,060 (£7,956) and £42,385 (£41,385). For 2015/16 the 9% bill total is £3,089
(£3,052). 2% Class 4 is payable on all earnings above the upper limit of £42,385. Class 2, £2.75 (£2.70) per week. Class 4 and
Class 2 contributions are now paid with tax bills. Small earnings exception can apply to Class 2 payments, if taxable profits
are below £5,965 (£5,885). Contributions are not payable if you are of pensionable age at the start of tax year.
State pension accrual of rights
Earnings over the lower earnings limit £5,824 2015-16 gain credits for state pension. Up to 5 April 2016, 30 years’ credits
required, then 35 years. The upper accrual point is £40,040. This will be abolished from 6 April 2016.
INDIVIDUAL SAVINGS ACCOUNTS ‘ISA’, THE NEW ISA ‘NISA’, AND JUNIOR ISA ‘JISA’ FOR UK RESIDENTS
Annual investment limit
Maximum cash investment
Junior ISA investment limit (under 18)
2015/2016
15,240
4,080
4,080
2014/2015
£15,000*/11,880
£15,000*/5,940
£4,000*/3,840
ISA income and gains are non taxable. 100% flexibility between cash and equities. Tax free exemption transfers on death of
first spouse.
INVESTMENT RELIEFS
Enterprise Investment Schemes ‘EIS’
(can be carried back one tax year)
Social Investment tax relief ‘SITR’ can attract hold-over
relief
SEED Enterprise Investment Schemes ‘SEIS’ (note (i)
below)
Community Investment Tax Relief ‘CITR’
Maximum pension contribution percentage of earned
income (note (ii) below)
Maximum pension contribution without earned income
Lifetime limit for pensions savings
Venture capital trusts ‘VCT’ Tax relief rate up to
Gross 2014/2015 and
2015/2016
£1million
@ 30%
£1 million
@ 30%
£100,000 @
50% rate
no limit
25% over 5 years
100% up to £40,000
Marginal rate
£3,600
£1,250,000
£200,000 @ 30%
CGT Position
100% exempt
100% exempt if qualifying
100% exempt
No exemption
100% exempt
100% exempt
100% exempt
100% exempt
Note (i): EIS and SEIS can be related back one tax year. Only 50% of gain exempted 2013/14 onwards. Note (ii): Unused
pension relief from earlier tax years may be available.
COMPANIES AND CORPORATION TAX
Year ending
Small profits rate £0 to £300,000
Marginal rate £300,000 to £1.5 million
Main rate, larger profits £1.5 million plus
Notional tax credit on dividend
Profits generated from patents are taxed at 10% from 1 April 2013.
31 March 2016
20%
N/A
20%
10%
31 March 2015
20%
21%
21%
10%
VAT RULES
The VAT registration limit is currently £81,000 for any past 12 months' turnover (including all services and recharged
expenses). For smaller businesses, which need to register for VAT, there are incentives to join the VAT Flat rate scheme. For
more information look at www.hmrc.gov.uk, or discuss it with me. Cash accounting is available up to £1.35 million turnover.
VAT filing for European sales
Filing for EU sales and purchases must be done by a calendar quarter with deadlines of 21 days.
CAPITAL ALLOWANCES FOR SMALL BUSINESSES (1 April applies to companies and 6 April to those who are self employed.)
Annual Investment Allowance ‘AIA’ at 100% is increased from £250,000 to £500,000 on 16 April 2014 to 31 December 2015,
then reducing to £25,000. Writing down allowances ‘WDA’ are allowed on unrelieved expenditure. The standard WDA rate
is 18% and the lower WDA 8%.
CARS, MILEAGE AND ALLOWANCES
Rates on first 10,000 miles, 45p for all cars and for further mileage 25p a mile plus 5p per mile per passenger. Bicycle rate
20p a mile. Self-employed can, instead, claim non fuel expense and proportional capital allowances on the car based on
percentage business use, plus a lower fuel rate of around 16p per mile. Volunteer workers with good records may claim
work related mileage.
MOTOR CARS – CO2 EMISSIONS AND ALLOWANCES
Capital Allowances 2015/16 and 2014/15
from 1 April 2013 up to 95g/km to 31 March 2018 (110g/km)
100%
from 1 April 2013 95g/km – 130g/km (110- 160g/km)
18%
from 1 April 2013 > 130g/km (160g/km)
8%
There is a £3,000 per car, per tax year, writing down allowance limit. For cars available by category see www.whatcar.com.
ANNUAL STAFF PARTIES ─ The tax free limit is £150, VAT inclusive, per employee and also £150 for one guest per employee. All
employees must be invited to attend.
December 2014
VP 2014/Mailings/Autumn Statement 2014/Tax Rates and Allowances summary December 2014

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