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INCOME TAX
The personal allowance for 2016/17 increases by £400 to £11,000. The marriage allowance increases by £40 to £1,100.
If no further changes are announced the rates and allowances will be as follows:
Bands of taxable income
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
0%
0%
Dividend ordinary rate – for dividends otherwise
taxable at the basic rate (effective rate with
tax credit)*
10% (0%)
7.5%
Dividend upper rate – for dividends otherwise
taxable at the higher rate (effective rate with
tax credit)*
32.5% (25%)
32.5%
Dividend additional rate – for dividends
otherwise taxable at the additional rate
(effective rate with tax credit)*
37.5% (30.6%)
38.1%
Starting rate limit (savings income)
£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
*From April 2016 the dividend tax credit will be abolished and replaced with a new £5,000 tax-free dividend allowance.
TAX CREDITS
The forthcoming reduction in tax credits will be cancelled meaning that the tax credit taper rate and thresholds remain unchanged.
Tax credits will still be phased out as universal tax credit becomes the primary bene"t vehicle. The income rise disregard will be £2,500.
There are no further proposed changes to the universal credit taper, or to the work allowances beyond those that passed
through parliament.
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Personal Announcements
PERSONAL
ANNOUNCEMENTS