• E-mail
  • Facebook
  • LinkedIn
  • Phone
  • Twitter

Schedule Appointment

Emma Stevens Accountancy

Chartered Accountant in Hemel Hemstead, Chesham, Kings Langley, Berkhamstead, Hertfordshire

  • Home
    • About Me
    • Testimonials
    • PRIVACY NOTICE
    • Contact
    • Book an appointment
  • Accounts Services
  • Frequently Asked Questions
    • I’ve started to work self employed. What do I need to do?
    • How do I pay my VAT return?
    • How do I pay my Employer’s PAYE?
    • How do I pay my personal tax return?
    • When is my personal tax return due?
    • Why do I need to pay a payment on account?
    • How do I pay my Corporation Tax?
    • Car Travel Expenses – Mileage
  • Articles
    • 2018 Budget Summary
    • 2018-19 Tax Tables
    • A great review of Emma Stevens Accountancy!
    • A Guide to Rental Property Income Tax
    • Autumn Budget 2017
    • Bookkeeping basics for small businesses
    • Budgeting Tips for Small Businesses
    • Capital Gains Tax
    • Changes to the VAT Flat Rate scheme from 1 April 2017
    • Choosing an accountant
    • Did you know? …. Marriage Allowance
    • Did you know?…… Use of home as office
    • Expenses and employee benefits – how are they taxed and what do I need to do?
    • How SageOne Accounting can save you time and money
    • IR35 – Employee vs Self-employed?
    • Is my business ready for a HMRC inspection?
    • My company is VAT registered – what do I need to do now?
    • PAYE Responsibilities – Becoming an Employer for the First Time
    • Pension auto enrolment for small companies
    • Rental income – what expenses can I offset?
    • Salary or Dividend – how the new dividend tax legislation will impact small company owners
    • Self Assessment Tax Return
    • Spring Budget 2017
    • Spring Statement 2018
    • Starting a new business – sole trader vs limited company
    • Tax Rates 2017-18
    • Tax Rates and Allowances for 2015-16
    • The importance of knowing your financial situation – all the time!
    • The New Business Checklist – Setting up a New Business
    • U-Turn On Self Employed Class 4 NIC Increases
    • VAT Flat Rate Scheme
    • Welcome to my new website!
    • What are a Director’s responsibilities?
    • What records do I need to keep for my limited company?
    • Why go limited? The pros and cons of becoming a Limited Company
    • Writing a business plan
  • Secure Portal
  • Book An Appointment

Tax Rates and Allowances for 2015-16

23/11/2015 By Emma Stevens

Explaining the complete list of tax rates and allowances for 2015-16, plus any changes to the rules in this year would take more than a blog post – that’s what accountants are for, after all. We’ve put together a quick guide to some of the most important taxes that affect you as an individual and as small business owner.

Your actual income will be affected not only by the tax rates, but also by changes in personal allowances. For help with tax and any other financial issues, feel free to contact Emma Stevens Accountancy.

Tax bands and thresholds for 2015-16

Tax bands for 2015-16 haven’t changed a great deal, except for the 10 per cent savings band which has been replaced with a £5,000 nil-rate band for people on a low income.

Income Tax Rates

Income tax for self-employed people is only paid on the profits, not the gross income; deduct business expenses, capital allowances and losses to find your profit.

  • First £31,785 of taxable income                         20%
  • £31,786 to £150,000                                         40%
  • Excess over £150,000                                       45%

Personal Allowances

  • Individuals born after 5 April 1938 £10,600
  • Individuals born before 6 April 1938 £10,660tax allowances

Annual investment allowance

The current annual investment allowance is £500,000 until December 2015, when it will be reduced.  You can spend up to £500,000 on business-related capital assets in this tax period, and offset it against your income tax bill.

Expenses you can claim

You can deduct the costs of anything bought for your business when you work out taxable profits and get immediate tax relief for the full amount spent unless it’s an item that counts as a capital asset- such as a computer which is accounted for under different rules.

  • Running costs of a car or vehicle, including petrol, car tax, insurance, repairs and servicing – depending on the proportion of mileage that was business-related.
  • Running costs of your business premises – or if you work from home, your home office costs
  • Salaries and benefits of any employees

National Insurance

National Insurance bands and rates can be confusing because they are different for employees, sole traders and limited company directors. For self-employed business people;

Class 2 National Insurance contributions

For profits up to £8,060 in 2015-16, you have to pay Class 2 contributions at £2.80 a week. You can claim exemption if your annual profits are below £5,965 in 2015-16.

Class 4 National Insurance contributions

If your profits are more than £8,060 in 2015-16, you will have to pay Class 4 contributions. This is calculated at 9% on profits between £8,060 and £42,385 in the 2015-16 tax year.

On profits above £42,385, the rate drops to 2%.

If your business is a limited company, even if you’re the only employee, you are counted as employed and so the employee income tax rules will apply.

Value Added Tax (VAT)

If your turnover is over £82,000 in 2015-16 you also have to register for VAT and pay quarterly. You can also register voluntarily if your turnover is less than £82,000, and it maybe worth doing so if you have to pay VAT on things bought for your business, as you get to claim the VAT back if you’re registered. It depends on your consumer as you will need to add VAT to your sales.

If you charge more VAT on the goods or services you sell than you pay in items you buy for your business, you will have to pay HMRC the balance.

If your turnover is less than £150,000, you could also benefit from using the flat-rate scheme. The scheme calculates your VAT payments as a percentage of your VAT-inclusive turnover, which makes it good value for small businesses as well as simplifying admin.

VAT Rates

The standard rate of VAT is 20%.

There is a list of VAT flat rates available for different types of business on the HMRC website.

Marriage Allowance

This year, married couples and civil partners can transfer up to £1,060 of ‘unused’ tax allowance to each other. If one of your incomes is below their allowance, they can transfer up to £1,060 of the excess, as long as their spouse pays tax at 20% – this can help save up to £212 a year in tax.

For more information and a full list of all personal and business tax allowances and changes, see the HMRC website.

All data and information provided in this advert is for informational purposes only and is not intended to substitute for obtaining accounting, tax, or financial advice from a professional accountant. Emma Stevens Accountancy Ltd makes no representations as to accuracy, completeness, correctness, suitability, or validity of any information in this ad and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. All information is provided on an as-is basis.

  • I’ve started to work self employed. What do I need to do?
  • How do I pay my Corporation Tax?
  • How do I pay my Employer’s PAYE?
  • How do I pay my personal tax return?
  • How do I pay my VAT return?
  • When is my personal tax return due?
  • Why do I need to pay a payment on account?

Recent Posts

  • Spring Statement – 23 March 2022
  • Spring Statement – 2022/23 tax data
  • Spring Statement – Announcements
  • Spring Statement – Economic Update
  • Spring Statement – Introduction
Emma Stevens Accountancy
14 High Street,
Bovingdon,
Hertfordshire,
HP3 0HG
Get directions
01442 831462
info@emmastevensaccountancy.co.uk
Mo,Tu,We,Th,Fr 9:00 am – 5:00 pm
Copyright © 2022 Emma Stevens Accountancy · Site designed by Kanso Creative Company number - 07666723 Registered office - 14 High Street, Bovingdon, Hertfordshire, HP3 0HG Schedule time with me
This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish.Accept Read More
Privacy & Cookies Policy

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Non-necessary
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
SAVE & ACCEPT