Personal Allowances and Tax Bands

For those born after 5 April 1938 the personal allowance is currently £10,600. Those born before 6 April 1938 have a slightly higher allowance. Legislation has already been enacted to increase the personal allowance to £11,000 in 2016/17. From 2016/17 onwards one personal allowance will apply regardless of age.

Not everyone has the benefit of the full personal allowance. There is a reduction in the personal allowance for those with ‘adjusted net income’ over £100,000 which is £1 for every £2 of income above £100,000. So for 2015/16 there is no personal allowance where adjusted net income exceeds £121,200 (£122,000 for 2016/17).

Tax bands and rates

The basic rate of tax is currently 20%. The band of income taxable at this rate is £31,785 so that the threshold at which the 40% band applies is £42,385 for those who are entitled to the full basic personal allowance.

Legislation has already been enacted to increase the basic rate limit to £32,000 for 2016/17. The higher rate threshold will therefore rise to £43,000 in 2016/17 for those entitled to the full personal allowance.

The additional rate of tax of 45% remains payable on taxable income above £150,000.

Tax bands and personal allowance for 2017/18

The Chancellor has announced that the personal allowance will be increased to £11,500 and the basic rate limit increased to £33,500 for 2017/18. The higher rate threshold will therefore rise to £45,000 for those entitled to the full personal allowance.

For more information please do not hesitate to contact the team at Ward Williams Financial Services Ltd on 01932 830664 or by email on wwfs@wardwilliams.co.uk.

Workplace Pensions are here to stay

The Pension Regulator (TPR) is turning up the heat on Employers.

Employers must take action to put a qualifying registered Pension Scheme in place by the company’s ‘staging date’, otherwise compliance action will be taken.

In the last quarter of 2015, TPR have issued:

• 4818 Compliance Notices

• 224 Unpaid Contribution Notices

• 1594 Fixed Penalty Notices

• 31 Escalating Penalty Notices

In a report TPR said:

“In the next 12 months, more than 500,000 employers will go through Automatic Enrolment.  We expect to see a rise in the number of times we need to use our powers, so our message to employers remains clear: start getting your plans in place early or you risk being fined.”

If you need assistance in setting up an Auto Enrolment compliant scheme, Ward Williams Financial Services Ltd are able to assist.  Please contact us on 01932 830664 or wwfs@wardwilliams.co.uk.