Personal tax and benefits

by Ann Pauker
15/03/2017
HMRC has issued the following in their website:

 
Personal tax and benefits

1.1  Income tax bands of taxable income (£ per year)

Tax year                                  2016-17                                       2017-18
Basic rate                              £0-32,000                                    £0-33,500
Higher rate                          £32,001-150,000                     £33,500-150,000
Additional rate                 Over £150,000                           Over £150,000

1.2 Income tax rates - 2016-17
 Tax year 2016-17
 Main rates 1

Basic rate                                 20%
Higher rate                              40%
Additional rate                      45%

Dividend rates 2

Dividend ordinary rate - for dividends otherwise taxable at the basic rate
7.5%

Dividend upper rate - for dividends otherwise taxable at the higher rate
32.5%

Dividend additional rate - for dividends otherwise taxable at the additional rate
38.1%


1.3Income tax rates - 2017-18

Main rates 3

Basic rate                                 20%
Higher rate                             40%
Additional rate                     45%

Savings rates 4

Starting rate for savings  0%
Savings basic rate               20%
Savings higher rate            40%
Savings additional rate   45%

Dividend rates 5

Dividend ordinary rate - for dividends otherwise taxable at the basic rate    7.5%
Dividend upper rate - for dividends otherwise taxable at the higher rate      32.5%
Dividend additional rate - for dividends otherwise taxable at the additional rate  38.1%

Default rates 6

Default basic rate   20%
Default higher rate  40%
Default additional rate 45%


1.4Starting rates for savings income

                                                                  Tax year 2016-17 ​                                                            Tax year 2017-18
Starting rate for savings                         0%                                                                                              0%
Starting rate limit for savings         £5,000                                                                                   £5,000


1.5Special rates for trustees’ income
 
                                                                 Tax year 2016-17​                                                               Tax year 2017-18

Standard rate on first £1,000 of income which would otherwise be taxable at the special rates for trustees
Up to 20%, depends on the type of income
Up to 20%, depends on the type of income
Trust rate
45%
45%
Dividend trust rate
38.1%
38.1%


1.6Income tax allowances

Tax year 2016-17
Tax year 2017-18
Personal allowance


Personal allowance 7
£11,000
£11,500
Income limit for personal allowance
£100,000
£100,000
Income limit for Married couple’s allowance 8
£27,700
£28,000
Marriage allowance


Marriage allowance 9
£1,100
£1,150
Married couple’s allowance for those born before 6 April 1935


Maximum amount of married couple’s allowance 10
£8,355
£8,445
Minimum amount of married couple’s allowance 10
£3,220
£3,260
Blind person’s allowance


Blind person’s allowance
£2,290
£2,320
Dividend allowance


Dividend allowance 11
£5,000
£5,000
Personal savings allowance


Personal savings allowance for basic rate taxpayers 12
£1,000
£1,000
Personal savings allowance for higher rate taxpayers 12
£500
£500


2.National Insurance Contributions (NIC)
2.1Class 1 NICs: Employee and employer rates and thresholds (£ per week)

Tax year 2016-17
Tax year 2017-18
Weekly Lower Earnings Limit (LEL) 13
112
113
Weekly Primary Threshold (PT) 13
155
157
Weekly Secondary Threshold (ST) 14
156
157
Upper Earnings Limit (UEL) 15
827
866
Upper Secondary Threshold for under 21s 15
827
866
Apprentice Upper Secondary Threshold (AUST) for under 25s 15
827
866
Employment Allowance (per employer)
3,000 per year
3,000 per year

Employee’s (primary) Class 1 contribution rates
Tax year 2016-17
Tax year 2017-18
Earnings band 16
NIC rate (per cent)
NIC rate (per cent)
Below LEL
0
0
LEL - PT 17
0
0
PT- UEL
12
12
Above UEL
2
2

Married woman’s reduced rate for (primary) Class 1 contribution rates
Tax year 2016-17
Tax year 2017-18
Weekly earnings from between the PT and UEL
5.85
5.85
Weekly earnings from above UEL
2
2

Employer’s (secondary) Class 1 contribution rates
Tax year 2016-17
Tax year 2017-18
Earnings band 18


Below ST
0
0
Above ST
13.8
13.8

Employer’s (secondary) Class 1 contribution rates for employees under 21
Tax year 2016-17
Tax year 2017-18
Earnings band 19


Below UST
0
0
Above UST
13.8
13.8

Employer’s (secondary) Class 1 contribution rates for Apprentices under 25
Tax year 2016-17
Tax year 2017-18
Earnings band 20


Below AUST
0
0
Above AUST
13.8
13.8


2.2Class 2 NICs: Self-employed rates and thresholds (£ per week)

Tax year 2016-17
Tax year 2017-18
Small Profits Threshold (SPT) 13
5,965 per year
6,025 per year
Class 2 contribution rates 13
Tax year 2016-17
Tax year 2017-18
Annual Profits (£ a year) 21
£ per week
£ per week
Below SPT
0
0
Above SPT 22
2.80
2.85
Special Class 2 rate for share fishermen
3.45
3.50
Special Class 2 rate for volunteer development workers
5.60
5.65


2.3Class 3 NICs: Other rates and thresholds (£ per week)

Tax year 2016-17
Tax year 2017-18
Voluntary contributions 13 23
14.10
14.25


2.4Class 4 NICs: Self-employed rates and thresholds (£ per year)

Tax year 2016-17
Tax year 2017-18
Lower Profits Limit (LPL) 13
8,060
8,164
Upper Profits Limit (UPL) 15
43,000
45,000

Class 4 contribution rates
Tax year 2016-17
Tax year 2017-18
Annual profits band 24
NIC rate (per cent)
NIC rate (per cent)
Below LPL
0
0
LPL to UPL
9
9
Above UPL
2
2


3.Working and Child tax credits, child benefit and guardians allowance

3.1Working and child tax credits
£ per year (unless stated)
Tax year 2016-17
Tax year 2017-18
Working tax credit


Basic element
£1,960
£1,960
Couple and lone parent element
£2,010
£2,010
30 hour element
£810
£810
Disabled worker element
£2,970
£3,000
Severe disability element
£1,275
£1,290
Childcare element of the working tax credit


Maximum eligible cost for one child
£175 per week
£175 per week
Maximum eligible cost for two or more children
£300 per week
£300 per week
Percentage of eligible costs covered
70%
70%
Child tax credit


Family element
£545
£545
Child element
£2,780
£2,780
Disabled child element
£3,140
£3,175
Severely disabled child element
£1,275
£1,290
Income thresholds and withdrawal rates


Income threshold
£6,420
£6,420
Withdrawal rate (per cent)
41%
41%
First threshold for those entitled to child tax credit only
£16,105
£16,105
Income rise disregard
£2,500
£2,500
Income fall disregard
£2,500
£2,500

3.2Child benefit (£ per week)

Tax year 2016-17
Tax year 2017-18
Eldest/only child
£20.70
£20.70
Other children
£13.70
£13.70
Guardians allowance (£ per week)


Guardians allowance
£16.55
£16.70


4.Tax free savings accounts

Tax year 2016-17
Tax year 2017-18
Individual Savings Account (ISA) subscription limit
£15,240
£20,000
Junior ISA subscription limit
£4,080
£4,128
Child Trust Fund (CTF) subscription limit
£4,080
£4,128


5.Fuel benefit and van benefit charge

Tax year 2016-17
Tax year 2017-18
Car fuel benefit charge multiplier
£22,200
£22,600
Van fuel benefit charge
£598
£610
Van benefit charge
£3,170
£3,230



1.        Apply to non-dividend income, including income from savings, employment, property or pensions. From 2017-18, the main rates will be separated into the main rates, the savings rates and the default rates ↩
2.        Apply to dividend income received above the £5,000 tax-free Dividend Allowance, introduced in April 2016 to replace the Dividend Tax Credit ↩
3.        Apply to non-savings, non-dividend income, including income from employment, property or pensions not subject to the Scottish Rate of income tax ↩
4.        Apply to savings income ↩
5.        Apply to dividend income received above the £5,000 tax-free Dividend Allowance, introduced in April 2016 to replace the previous Dividend Tax Credit ↩
6.        Apply to non-savings and non-dividend income of any taxpayer that is not subject to either the Main rates or the Scottish Rates of income tax ↩
7.        The Personal Allowance reduces where the income is above £100,000 – by £1 for every £2 of income above the £100,000 limit. This reduction applies irrespective of date of birth ↩
8.        This age-related allowance is reduced by £1 for every £2 of income over this limit ↩
9.        This transferable allowance is available to married couples and civil partners who are not in receipt of married couple’s allowance. A spouse or civil partner who is not liable to income tax; or not liable at the higher or additional rates, can transfer this amount of their unused personal allowance to their spouse or civil partner. The recipient must not be liable to income tax at the higher or additional rates ↩
10.     The relief for this allowance is given at 10%. ↩ ↩2
11.     From April 2016, the new Dividend Allowance means that individuals will not have to pay tax on the first £5,000 of dividend income they receive ↩
12.     From April 2016, the new Personal Savings Allowance means that basic rate taxpayers will not have to pay tax on the first £1,000 of savings income they receive and higher rate taxpayers will not have tax to pay on their first £500 of savings income. ↩ ↩2
13.     Uprated by CPI ↩ ↩2 ↩3 ↩4 ↩5 ↩6
14.     Autumn Statement 2016 announced that the Secondary Threshold would be aligned with the Primary Threshold. From April 2018 onwards, it will be uprated in line with CPI ↩
15.     These thresholds are uprated in line with the Higher Rate Threshold to maintain alignment between the Upper Earnings Limit and Higher Rate Threshold ↩ ↩2 ↩3 ↩4
16.     The limits are defined as LEL - Lower Earnings Limit; PT - Primary Threshold; and UEL - Upper Earnings Limit ↩
17.     No National Insurance contributions (NICs) are actually payable but a notional Class 1 NIC is deemed to have been paid in respect of earnings between the LEL and PT to protect contributory benefit entitlement. ↩
18.     The limit is defined as ST – Secondary Threshold ↩
19.     The limit is defined as UST – Upper Secondary Threshold ↩
20.     The limit is defined as AUST – Apprentice Upper Secondary Threshold ↩
21.     The Limit is defined as SPT – Small Profits Threshold ↩
22.     Class 2 NICs are liable to be paid by all self-employed persons with profits above the Small Profits Threshold (SPT). The self-employed may choose to pay Class 2 if their profits are below the SPT ↩
23.     Class 3 NICs can be paid by contributors to make the year a qualifying year for the basic State Pension (new State Pension from 6 April 2016) and Bereavement Benefit purposes ↩
24.     These limits are defined as LPL – Lower Profits Limit; and UPL – Upper Profits Limit 

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