2016-17 Tax & National Insurance Rates

As we’ve passed the end of the 2016-17 Tax Year, we thought it would be appropriate to share the relevant Income Tax Rates that apply for the year ended 5th April 2017. These rates apply when preparing and calculating your Tax payable (or repayable) on your self assessment Tax return.

 

2016-17 Personal Tax Allowances & Bands

 

Allowance % of income / £ allowance p.a.
Basic Rate Tax 20%
Higher Rate Tax 40%
Additional Rate Tax 45%
Dividend Basic Rate 7.5%
Dividend Higher Rate 32.5%
Dividend Additional Rate 38.1%
Basic Rate Tax Band £0 – £32,000
Higher Rate Tax Band £32,000 – £150,000
Additional Rate Tax Band > £150,000

 

2016-17 UK Income Tax Rates

Details Rate
Personal Allowance £11,000
Limit for Personal Allowance £100,000 – Personal Allowance reduced by £1 for every £2 above this limit
Marriage Allowance £1,100
Limit for Married Couple’s Allowance £27,700 – Marriage Allowance reduced by £1 for every £2 above this limit
Blind Person’s Allowance £2,290
Dividend Allowance £5,000 (£2,000 from 2018-19)

 

2016-17 National Insurance Allowances

Band £ per week / annum
Lower Earnings Limit £112 p/w
Primary Threshold (PT) £155 p/w
Secondary Threshold (ST) £156 p/w
Upper Earnings Limit (LEL) £827
Upper Profits Limit (UPL) £43,000
Upper Secondary Threshold for Under 21s £827
Small Profits Threshold (SPT) £5,965
Lower Profits Limit (LPL) £8,060
Employment Allowance £3,000 per employer, per annum
Apprentice Upper Secondary Threshold (AUST) for U25s £827

 

2016-17 National Insurance Rates

Class 1 – Employee Rates

Earnings % of Income
Below LEL : £112 0%
Between LEL and PT : £112 – £155 0%
Between PT and UEL : £155 – £827 12%
Above UEL : £827 2%

Class 1 – Employer Rates

Earnings % of Income
Below ST : £156 0%
Above ST : £156 13.8%

 

2016-17 Self-Employed National Insurance Contribution Rates (Class 2 & 4 NIC)

Two types of National Insurance rates apply for those in self-employment or partnership. Class 2 NIC rate applies for any earnings over £5,965 per annum and is payable for each week. Class 4 applies to profits for the whole year and has it’s own brackets:

Band £ per week :: Class 4 NIC% of income
Below SPT : £5,965 £0 :: 0%
Between SPT and LPL : £5,965 – £8,060 £2.80 p/w :: 0%
Between LPL and UPL : £8,060 – £43,000 £2.80 p/w :: 9%
Above £43,000 £2.80 p/w :: 2%

 

2016-17 Corporation (Limited Company) Tax Rates

Corporation Tax rates are generally a lot lower than traditional self-employed UK Income Tax rates. That being said, recent changes to dividend Tax has made this a little more problematic. It maybe worth that you incorporate as a limited company but a detailed review of your Income Tax circumstances should be carried out whilst forecasting future activities.

For advice on this matter it is advised that you contact QuickRebates for a free consultation to see how we can help your needs.

Comments (2)

  • Harry

    Note to self, I must transfer my unused marriage allowance to my wife. Also, can I backdate this claim?

    Reply
    • Quick Rebates

      Hi Harry,

      Marriage allowance was introduced from 6th April 2015 (for the 2015/16 Tax year). If you did not make a claim for this year then it is possible for your claim to be backdated, as well as making a claim for the 2016/17 Tax year. Please get in touch to find out how we can help you with this claim

      Reply

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