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Income Tax

Bands 2015-16 2014-15
Savings starting rate – 0%* £0 – £5,000 £0 – £2,880
Basic rate 20% £0 – £31,785 £0 – £31,865
Higher rate 40% £31,786 – £150,000 £31,866 – £150,000
Additional rate 45% Over £150,000 Over £150,000

 

* Savings income is taxed at 0% up to £5,000 (2014-15 £2,880 @10%).
If an individuals taxable non-savings income exceeds £5,000 then the starting rate limit for savings will not be available.
The 0% rate only applies to the extent that other taxable income is less than £5,000.
Dividends are deemed to be the top slice of total income in computing tax liability at 10%, 32.5% or 37.5% respectively for 2015-16.

 

Reliefs 2015-16 2014-15
Personal allowance
– Born after 5/4/48 £10,600 £10,000
– Born between 6/4/38 and 5/4/48 £10,600 £10,500
– Born before 6/4/38 £10,660 £10,660
Registered blind person’s allowance £2,290 £2,230
Income limit for personal allowance* £100,000 £100,000
Income limit for age related allowances** £27,700 £27,000

 

* The personal allowance is gradually withdrawn by £1 for every £2 of income over £100,000.
** The age related allowances are gradually withdrawn by £1 for every £2 of income over £27,700 (2014-15 £27,000), for those born before 6 April 1948 until reduced to level of basic personal allowance.
Married couples allowance – tax relief given at 10%

 

– Born before 6 April 1935 £8,355 £8,165
– Minimum amount £3,220 £3,140
– Marriage allowance* £1,060

 

* For those born after 5 April 1938, a basic rate or non tax payer can transfer up to £1,060 of their personal allowance to a spouse or civil partner who is not a higher rate tax payer.
There is a cap on certain Income Tax reliefs of the greater of £50,000 or 25% of income.