The tax year will end on 5th April, with the Chancellor’s budget now behind us, we know how we will be taxed in the new tax year.
He announced that more than 17 million people will no longer have to pay tax on their savings, as he proclaimed that Britain is finally moving from “austerity to prosperity”. The savings package comes on top of sweeping pensions reforms – due to be introduced within weeks – which will allow people to spend their retirement pots as they wish.
You will not pay Income Tax on the first £10,600 of your income, you then pay 20% until you have an income of £42,385 after which you pay 40%. If you are fortunate enough to earn over £100,000 then the tax suffered is 60% on the next portion of your income.
The Inheritance Tax allowance remains at £325,000 for an individual and £650,000 for a couple after which your assets would be taxed at 40%, although there are some reliefs available.
Tax free Capital Gains are set at £11,100 after which they are taxed at 18% and 28% depending on the size of the gain and your income. If you qualify for entrepreneurs relief you will pay 10%, but only on your first £10 million!
Stamp Duty on domestic property is tax: first £125,000 tax free, the band £125,001 – £250,000 at 2%, the band £250,001 – £925,000 at 5%, the band £925,000 – £1.5 million at 10% and above that, not that there are many houses valued at these amounts round here, 12%.
Corporation Tax is set at 20%. But please note that if you are going to buy a big piece of equipment the first year allowance will go down to £25,000 on 1/1/16. The current turnover limit when you have to register for VAT is £81,000.
The new rules on pensions mean you have much more flexibility on taking money out of your pension. The limit of £1 million in your pension pot may sound like a lot, but it’s always best to check. If you have a final salary pension and are a higher rate tax payer you might want to double check, you may be surprised at the value placed on your pension rights.
See the new 2015/2016 UK Tax Data Bank for small businesses