Dec 2015


Tax Rates, Tax Credit Rates and Thresholds 2016-17 Tax Year

HMRC have announced the tax rates, tax credit rates and thresholds for the 2016-17 tax year which those processing payroll for employees should be aware of.

Tax Rates and Tax Bands

There are no changes in the basic rate, higher rate or additional rate of taxes at 20%, 40% and 45% respectively.

The basic rate band has increased by £215 from £0-£31,785 in 2015-16 to £0-£32,000. The higher rate has increased from £31,786-£150,000 to £32,000-£150,000 where the additional rate remains at over £150,000.

Personal Allowances

From 2016-17 onwards, all individuals will be entitled to the same personal allowance, regardless of the individuals’ date of birth. This personal allowance is £11,000, an increase of £400 from 2015-16. The income limit for personal allowance remains at £100,000.
The marriage allowance has increased £40 from £1,060 to £1,100. There have been other allowances such as a dividend allowance and personal savings allowance introduced for the 2016-17 tax year.

National Insurance Contribution Thresholds

There are no changes to the weekly lower earnings limit (LEL), weekly primary threshold or the weekly secondary threshold. The upper earnings limit (UEL) has increased from £815 in 2015-16 to £827 in 2016-17. There are no changes to the Class 1 National Insurance contribution rates for 2016-17.

The Employment allowance has increased by £1,000 to £3,000 for 2016-17 per employer for the tax year.

The details in full are available to view on the HMRC website with the following link:

Posted byDebbie ClarkeinPayroll Software