Tax and tax credit rates and thresholds for 2016-17 

 
2015-16  
2016-17 
 
% of income/ per year  
 
Basic rate  
20% 
20% 
Higher rate  
40% 
40% 
Additional rate  
45% 
45% 
Starting rate for savings income 1  
0% 
0% 
Dividend ordinary rate for dividends otherwise taxable at the basic rate (effective rate with tax credit) 2  
10% (0%)  
7.50% 
Dividend upper rate for dividends otherwise taxable at the higher rate (effective rate with tax credit) 2  
32.5% (25%)  
32.50% 
Dividend additional rate for dividends otherwise taxable at the additional rate (effective rate with tax credit) 2  
37.5% (30.6%)  
38.10% 
Starting rate limit (savings income) 1  
5,000 
5,000 
Basic rate band  
0-31,785  
0-32,000 
Higher rate band  
31,786-150,000  
32,001-150,000 
Additional rate band  
Over 150,000  
Over 150,000 

Income tax allowances 

 
2015-16 
 
% of income/ per year 
Personal allowance: 
 
Born after 5 April 1938 3 
10,600 
Born before 5 April 1938 3 4 
10,660 
Income limit for personal allowance 3 
100,000 
Income limit for personal allowances (born before 6 April 1938) 4 
27,700 
Marriage allowance: 
 
Marriage allowance 5 6 
1,060 
Married couples allowance for those born before 6 April 1935: 
 
Maximum amount of married couples allowance 7 8 
8,355 
Minimum amount of married couples allowance 7 8 9 
3,220 
Blind persons allowance: 
 
Blind persons allowance 
2,290 
 
2016-17 
 
% of income/ per year 
Personal allowance: 
 
Personal Allowance 10 
11,000 
Income limit for personal allowance 10 
100,000 
Income limit for married couples allowance 11 
27,700 
Marriage allowance: 
 
Marriage allowance 12 13 
1,100 
Married couples allowance for those born before 6 April 1935: 
 
Maximum amount of married couples allowance 14 15 16 
8,355 
Minimum amount of married couples allowance 14 15 16 17 
3,220 
Blind persons allowance: 
 
Blind persons allowance 16 
2,290 
Dividend allowance: 
 
Dividend allowance 18 
5,000 
Personal savings allowance: 
 
Personal savings allowance for basic rate taxpayers 19 
1,000 
Personal savings allowance for higher rate taxpayers 19 
500 

National Insurance contribution thresholds 

 
2015-16 
2016-17 
 
per week 
per week 
Weekly Lower Earnings Limit (LEL) 20 
112 
112 
Weekly Primary Threshold (PT) 20 
155 
155 
Weekly Secondary Threshold (ST) 21 
156 
156 
Upper Earnings Limit (UEL) 
815 
827 
Upper Profits Limit (UPL) 
42,385 per year 
43,000 per year 
Upper Secondary Threshold for U21s 
815 
827 
Small Profits Threshold (SPT) 20 22 
5,965 per year 
5,965 per year 
Lower Profits Limit (LPL) 
8,060 per year 
8,060 per year 
Employment Allowance 
2,000 (per year, per employer) 
3,000 (per year, per employer) 
Apprentice Upper Secondary Threshold (AUST) for under 25s 23 
827 

Class 1 National Insurance contribution rates 2016-17 

Earnings ( a week) 24 
NIC rate (%) 
Below 112 (LEL) 
112-155 (PT) 25 
155-827 (UEL) 
12 
Above 827 
2 
Earnings ( a week) 24 
NIC rate (%) 
Below 156 (ST) 
Above 156 (ST) 
13.8 
Annual Profits ( a year) 26 
Class 2 ( a week) 27 
Class 4 (%) 
Below 5,965 (SPT) 28 
5,965 to 8,060 (LPL) 
2.8 
8,060 to 43,000 (UPL) 
2.8 
Above 43,000 
2.8 
2 
 
2015-16 
2016-17 
Married Womens reduced rate (%) 29 
5.85% 
5.85% 
Special Class 2 rate for share fishermen 30 
3.45 per week 
3.45 per week 
Special Class 2 rate for volunteer development workers 30 
5.60 per week 
5.60 per week 
Class 3 rate 30 31 
14.10 per week 
14.10 per week 

Working and Child Tax Credit rates and thresholds 

 
2015-16 
2016-17 
Change 
 
a year 
a year 
 
Basic element 
1,960 
1,960 
0 
Couple and lone parent element 
2,010 
2,010 
30 hour element 
810 
810 
Disabled worker element 
2,970 
2,970 
Severe disability element 
1,275 
1,275 
Childcare element 
 
 
 
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 
% of eligible costs covered (%) 
70% 
70% 
0 
 
2015-16 
2016-17 
Change 
 
a year 
a year 
 
Family element 
545 
545 
Child element 
2,780 
2,780 
Disabled child element 
3,140 
3,140 
Severely disabled child element 
1,275 
1,275 
0 
 
2015-16 
2016-17 
Change 
 
a year 
a year 
 
Income threshold 
6,420 
6,420 
Withdrawal rate (%) 
41 
41 
First threshold for those entitled to Child Tax Credit only 
16,105 
16,105 
Income rise disregard 
5,000 
2,500 
2,500 
Income fall disregard 
2,500 
2,500 
0 
 
2015-16 
2016-17 
Change 
 
a year 
a year 
 
First Child 
21 
21 
Second and subsequent children 
14 
14 
Guardians Allowance 
17 
17 
0 
 
2015-16 
2016-17 
 
 
a year 
a year 
 
Individual Savings Account (ISA) subscription limit 
15,240 
15,240 
 
Junior ISA subscription limit 
4,080 
4,080 
 
Child Trust Fund (CTF) subscription limit 
4,080 
4,080 
 
 
2015-16 
2016-17 
 
Car fuel benefit charge multiplier 
22,100 
22,200 
 
Van fuel benefit charge 
594 
598 
 
 
2015-16 
2016-17 
 
Van benefit charge 
3,150 
3,170 
 
From 2008-09 there is a starting rate for savings income only. If an individuals taxable non-savings income exceeds the starting rate limit, then the starting rate for savings will not be available for savings income.  
From April 2016 the dividend tax credit will be abolished and replaced with a new 5,000 tax-free Dividend Allowance.  
This allowance is subject to the 100,000 income limit which applies regardless of the individuals date of birth. The individuals personal allowance is reduced where their income is above this limit. The allowance is reduced by 1 for every 2 above the limit.  
This allowance is subject to the 27,700 income limit. The individuals personal allowance is reduced where their income is above this limit. The allowance is reduced by 1 for every 2 above the limit but is not reduced below 10,600 (unless the 100,000 income limit applies see note 3). 
This transferable allowance is available to married couples and civil partners who are not in receipt of married couples allowance. A spouse or civil partner who is not liable to income tax; or not liable at the higher or additional rate, can transfer this amount of their personal allowance to their spouse or civil partner. The recipient must not be liable to income tax at the higher or additional rate.  
The relief for this allowance is given at 20%.  
This allowance is subject to the 27,700 income limit. The individuals married couples allowance is reduced by 1 for every 2 above the limit. That reduction only applies after any reduction to their personal allowance (see note 2). The individuals married couples allowance is never reduced below the minimum amount.  
The relief for this allowance is given at 10%.  
This is the maximum relief for maintenance payments where at least one of the parties was born before 6 April 1935. 
10 
From 2016-17 onwards, all individuals will be entitled to the same personal allowance, regardless of the individuals date of birth. This allowance is subject to the 100,000 income limit which applies regardless of the individuals date of birth. The individuals personal allowance is reduced where their income is above this limit. The allowance is reduced by 1 for every 2 above the limit. 
11 
This allowance is subject to the 27,700 income limit. The individuals personal allowance is reduced where their income is above this limit. The allowance is reduced by 1 for every 2 above the limit but is not reduced below 10,600 (unless the 100,000 income limit applies see note 10).  
12 
This transferable allowance is available to married couples and civil partners who are not in receipt of married couples allowance. A spouse or civil partner who is not liable to income tax; or not liable at the higher or additional rate, can transfer this amount of their personal allowance to their spouse or civil partner. The recipient must not be liable to income tax at the higher or additional rate.  
13 
The relief for this allowance is given at 20%.  
14 
This allowance is subject to the 27,700 income limit. The individuals married couples allowance is reduced by 1 for every 2 above the limit. That reduction only applies after any reduction to their personal allowance (see note 11). The individuals married couples allowance is never reduced below the minimum amount. 
15 
The relief for this allowance is given at 10%.  
16 
These amounts are subject to indexation the annual increase in CPI and have been frozen for 2016-17 at 2015-16 levels in order to prevent any cash loss to individuals as a result of negative growth in CPI.  
17 
This is the maximum relief for maintenance payments where at least one of the parties was born before 6 April 1935.  
18 
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. 
19 
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. 
20 
These thresholds are uprated by CPI. 
21 
The Weekly Secondary Threshold is uprated by CPI. 
22 
The Small Profits Threshold replaced the Small Earnings Exception on 6 April 2015.  
23 
The Upper Secondary Threshold for Apprentices under 25 comes into effect on 6 April 2016. 
24 
The limits are defined as LEL - lower earnings limit; PT - primary threshold; ST - secondary threshold; and UEL upper earnings limit.  
25 
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 LEL and PT to protect contributory benefit entitlement.  
26 
The limits are defined as SPT small profits threshold; LPL lower profits limit and UPL upper profits limit. 
27 
Class 2 NICs are paid at a weekly flat rate of 2.80 by all self-employed persons unless they have profits below the small profits threshold. The rate is uprated by CPI. 
28 
The self-employed may pay Class 2 contributions if their profits are below the SPT. 
29 
Married Womens Reduced Rate is paid only by married women and certain widows with valid reduced rate elections on earnings between PT and UEL and at 2% on earnings that exceed UEL.  
30 
These rates are uprated by CPI.  
31 
Class 3 NICs can be paid by contributors to make the year a qualifying year for basic State Pension, new State Pension and Bereavement Benefit purposes.  
 
 
 
 
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