≡ Menu

A new tax year – what’s changed for 2015/16?

As another tax year begins, we look at the new business / personal tax measures and rate changes that have come into effect this month.

Tax Rates 2015 16
Business tax changes

  • The VAT registration threshold has risen to £82,000. The de-registration threshold has increased to £80,000.
  • The business rates multiplier is 49.3p; the small business rate is 48p. You can apply for small business rate relief if the rateable value of your premises is £12,000 or less. Find out more in our business rates guide.
  • The main rate of Corporation Tax (on profits of £1.5m or more per year) has now aligned with the small profits’ rate (paid by most small businesses) – at 20%.
  • If your business hires under 21s, you will not have to pay Employers’ National Insurance Contribitions (NICs) on salaries up to £815 per week. Read more in this Government guide.

Personal tax changes

  • The personal allowance (the amount you can earn before paying any income tax) has risen to £10,600.
  • The higher rate threshold is £31,786. So you start paying 40% on income over this threshold, plus the personal allowance, i.e. income above £42,385.
  • Your first £5,000 in savings-related income is now free from tax.
  • The Couple’s Allowance allows those who are married or in a civil partnership to transfer up to £1,060 of their personal allowance to their spouse/partner. There is a catch though; it only applies if there is one basic rate taxpayer, and one non-taxpayer in the relationship. Find out more here.
  • A raft of new ‘pension freedom’ rules came into effect on 6th April. If you draw down your pension now, you will taxed at income tax rates (20, 40 or 45%), rather than the higher 55% rate which applied beforehand. You can also take 25% of your pension pot as a tax-free lump sum. If you die before the age of 75, your pension pot can be passed on tax-free. The pension changes are complex, so try this useful BBC guide for more details.
  • The Capital Gains Tax (CGT) threshold is now £11,100. Thereafter any gains are taxed at the basic and higher CGT rates (18 or 28%).
  • The annual ISA allowance rises from £15,000 to £15,240 (the ‘junior ISA’ allowance rises from £4,000 to £4,080).
  • From May 1st, Air Passenger Duty has been abolished for under-12s travelling in economy class.

Further information

For a complete list of tax rates and allowances for the current tax year, visit the 2015-16 tax rates. FreeAgent has also published a handy guide to 5 tax changes you should be aware of this tax year.

Hiscox Business Insurance
Pay with monthly direct debits

Top Articles

Do I need an accountant for my limited company?
Find out what a limited company accountant could do for you.

Mortgages for limited company directors and contractors Are you self-employed and looking at getting a mortgage?

How much limited company tax do I have to pay? Find out the latest tax information for limited company owners.

Company Bug Newsletter

Keep up to date with small business news and guides by signing up to the Company Bug newsletter.