Income Tax

Income Tax allowances table 2014-15 and 2015-16

Bands                                                                                       2015/16           2014/15
£0-£31,785 (£0-£31,865)                                                             20%                (20%)
£31,786-£150,000 (£31,866-£150,000)                                   40%                (40%)
Over £150,000 (£150,000)                                                          45%                (45%)

Dividends are taxed at 10% (10%), 32.5% (32.5%) or 37.5% (37.5%) as the top slice of total income.

Other savings income, primarily bank and building society interest, is taxed at 0% (10%) up to £5,000 (£2,880). This 0% rate is not available if taxable non-savings income exceeds £5,000 (£2,880).

There are special rules for trusts and also for individuals with income assessable on the remittance basis.

An additional tax charge applies to claw back child benefit where one income in a household exceeds £50,000, with full clawback by £60,000.

Cap on income tax reliefs
Certain income tax reliefs are capped at the greater of £50,000 or 25% of income. 
This excludes charitable donations.

Company cars – annual benefits

The annual benefit is a percentage of list price, with the percentage dependent on the level of CO2 emissions. The benefit is 5% for emissions of 0-50g/km, and 9% for 51-75g/km. For emissions of 76-94g/km, the rate is 13% and increases by 1% at 95g/km and then for each additional full 5g/km up to a maximum charge of 37% for emissions of 210g/km or more. Emission levels are rounded down to the nearest multiple of five. List price includes certain accessories, but is reduced for capital contributions of up to £5,000.

There is a diesel supplement of 3%, subject to the maximum charge of 37%. 

The taxable benefit for significant private use of vans is £3,150 (£3,090). 

Where fuel is provided for private use in a company car, the taxable benefit percentage is applied to £22,100 (£21,700). The benefit for fuel provided for a van with significant private use is £594 (£581). 

Personal allowances    
Born after 5 April 1948    
Born between 6 April 1938 and 5 April 1948 
Born before 6 April 1938  
Income limit for personal allowance (a)
Income limit for age related allowances (b)
Blind person’s allowance 
Married couple’s allowance (a) (c) 
Marriage allowance (d) 

2015/16  
£10,600
£10,600
£10,660 
£100,000
£27,700
£2,200 
£8,355
£1,060  

2014/15
(£10,000)
(£10,500)
(£10,660)
(£100,000)
(£27,000)
(£2,230)
(£8,165)
             -

(a) The personal allowance is reduced by £1 for each £2 by which income exceeds
 £100,000, irrespective of age or date of birth.

(b) Allowances for those born before 6 April 1948, first reduce by £1 for each £2 by 
which income exceeds the income limit, to a minimum of the lowest personal 
allowance. Such allowances can be reduced further under (a).

(c) Relief is limited to 10%, and extends to civil partnerships. At least one 
spouse/partner must have been born before 6 April 1935. The allowance is reduced 
where income exceeds the age related income limit, subject to an absolute 
minimum of £3,220 (£3,140).

(d) For those born after 5 April 1938, a basic rate or non taxpayer can transfer up 
to £1,060 of the personal allowance to a spouse or civil partner who is not a higher 
rate taxpayer.

Pensions  
Lifetime allowance (a)
Equivalent to defined benefit pension
Maximum contribution annual allowance (b)
Tax on excess
Normal minimum pension age

2015/16
£1,250,000
£62,500 
£40,000
Marginal rate
55        

2014/15
£1,250,000
£62,500 
£40,000
Marginal rate
55      

a)            Special rules can apply to individuals with larger benefits at 5 April 2006, and for those with benefits over £1,500,000 on 5 April 2012, and over £1,250,000 on 5 April 2014. Excess over the lifetime allowance may be subject to a 25% charge plus income tax on balances drawn, or 55% for lump sum benefits.

b)            Unused allowances from the previous three tax years (by reference to a limit of £50,000 p.a.to 2013/14 and £40,000 thereafter) may be carried forward, increasing the current year’s allowance in 2015/16.
Pension auto-enrolment minimum earnings                                      £10,000

Berkeley Townsend. 
In changing times – a certain service: experienced, expert and efficient.