Personal Tax Allowance and Tax Bands for 2015 – 2016

Income tax and allowances

The personal allowance will be increased to £10,600 for 2015/16.The higher rate threshold, above which individuals pay income tax at 40%, will rise to £42,385 for 2015/16. The national insurance upper earnings and upper profits limits will increase in line with the higher rate threshold. The basic, higher and additional rates of income tax for 2015/16 will remain at their 2014/15 levels.The government will continue consulting on whether to restrict the income tax personal allowance for non-residents. However, it was announced that there will be no change before April 2017.

Non-domiciled individuals

There will be an increase in the annual charge paid by nondomiciled individuals who are resident in the UK and wish to use the remittance basis of taxation. The charge paid by people who have been UK resident for seven out of the last nine years will remain at £30,000. But the charge for UK residents in 12 out of the last 14 years will increase from £50,000 to £60,000. There will also be a new charge of £90,000 for people who have been UK residentfor 17 of the last 20 years. The government will also consult on making the election apply for a minimum of three years.

Employee benefits and expenses

The administration of employee benefits and expenses will be simplified. From April 2015 there will be a statutory exemption for trivial benefits in kind costing less than £50. From April 2016, the £8,500 threshold below which employees do not pay income tax on certain benefits in kind will be replaced with new exemptions for carers and ministers of religion. A new exemption will be introduced for reimbursed expenses but it will not be available if it is used in conjunction with salary sacrifice. Travel expenses that local authorities pay to councillors will be exempt from income tax and employee NICs from 6 April 2015. Mileage payments will be limited to the Approved Mileage Allowance Payment rates.

If you have any questions please do not hesitate to contact us for advice on 0121 231 7080.