Key tax rates
Note all the below are correct at date of press, and are subject to amendment by HMRC. We can accept no liability for decisions taken without first contacting the office to ensure the rates are up to date:
Income Tax and Personal Savings
Income tax 2016/17 2015/16
Basic rate band – income up to £32,000 £31,785
Starting rate for savings income *0% *0%
Basic rate 20% 20%
Dividend ordinary rate **7.5% 0%
Higher rate - income over £32,000 £31,785
Higher rate 40% 40%
Dividend upper rate **32.5% 25%
Additional rate – income over £150,000 £150,000
Additional rate 45% 45%
Dividend additional rate **38.1% 30.6%
Savings rate limit (savings income) *£5,000 *£5,000
For 2016/17 Scottish taxpayers effectively subject to the same income tax rates as rest of UK. *If an individual's taxable non-savings income exceeds the starting rate limit, then the starting rate limit for savings will not be available for savings income. For 2016/17, £1,000 of savings income for basic rate taxpayers (£500 for higher rate) may be tax-free. **For 2016/17 the first £5,000 of dividends are tax-free.
National Insurance Contributions (NICs)
Payable on weekly earnings of:
Below £112 (lower earnings limit) Nil -
£112 - £155 (primary threshold) *0% -
Up to £156 (secondary threshold) - Nil
Above £156 - 13.8%
£155.01 - £827 (upper earnings limit) **12% -
£156.01 - £827 (upper secondary threshold (UST) for
under 21s) 12% 0%
£156.01 - £827 (apprentice upper secondary threshold
(AUST) for under 25s) 12% 0%
Above £827 **2% -
*No NICs are actually payable but a notional Class 1 NIC is deemed to have been paid; this protects contributory benefit entitlement.
**Over state pension age, the employee contribution is generally nil.
Employment Allowance Up to £3,000 (per year)
Class 1A On relevant benefits 13.8%
Class 2 Self employed £2.80 per week
Small profits threshold £5,965 per annum
Class 3 Voluntary £14.10 per week
Class 3A Voluntary contributions may be available to 5 April 2017 in order to obtain extra additional State Pension (maximum £25 a week) - variable contribution rates according to age
Class 4 Self employed on annual profits
£8,060 - £43,000 *9%
Excess over £43,000 *2%
*Exemption applies if state pension age was reached by 6 April 2016.
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