As already announced the basic personal allowance for 2015/16 will be £10,600. The Budget on 18 March announced that there will be a further above inflation increase to £10,800 for 2016/17 and £11,000 in 2017/18. Those aged 75 and over will continue to receive a personal allowance of £10,660 for 2015/16 and by 2016/17 they will receive the basic personal allowance. Note that if your adjusted net income exceeds £100,000, the personal allowance is reduced by £1 for every £2 over £100,000 giving an effective rate of 60% on income between £100,000 and £121,200 for 2015/16.
Contact us for advice on planning to avoid this 60% rate.
Income tax bands
The 20% basic rate band is £31,785 for 2015/16 and will be £31,900 for 2016/17. This means that you pay 40% tax if your taxable income exceeds £42,385 for 2015/16 and £42,700 for 2016/17. It is proposed that the higher rate tax threshold will increase to £43,300 for 2017/18. The 45% top rate continues to apply to taxable income over £150,000 for 2015/16.
Personal allowances
News: April 2015
Personal allowances
As already announced the basic personal allowance for 2015/16 will be £10,600. The Budget on 18 March announced that there will be a further above inflation increase to £10,800 for 2016/17 and £11,000 in 2017/18. Those aged 75 and over will continue to receive a personal allowance of £10,660 for 2015/16 and by 2016/17 they will receive the basic personal allowance. Note that if your adjusted net income exceeds £100,000, the personal allowance is reduced by £1 for every £2 over £100,000 giving an effective rate of 60% on income between £100,000 and £121,200 for 2015/16.
Contact us for advice on planning to avoid this 60% rate.
Income tax bands
The 20% basic rate band is £31,785 for 2015/16 and will be £31,900 for 2016/17. This means that you pay 40% tax if your taxable income exceeds £42,385 for 2015/16 and £42,700 for 2016/17. It is proposed that the higher rate tax threshold will increase to £43,300 for 2017/18. The 45% top rate continues to apply to taxable income over £150,000 for 2015/16.
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