Autumn Statement 2016: Rates and allowances
- Publish date: 26 October 2016
- Archived on: 01 January 2019
ICAEW Tax Faculty provides analysis of the announcements relating to tax rates and allowances in the 2016 Autumn Statement.
The Autumn Statement did not bring any changes to the tax rates and allowances which had already been announced for 2017/18. For income tax, the personal allowance and tax rate bands are, in summary:
|Year||Standard personal allowance||Basic rate band of 20% on income||Higher rate 40% threshold||Additional rate of 45% on income over|
The government confirmed its commitment to increase the personal allowance to £12,500 and the higher rate threshold to £50,000 by the end of the current parliament. However, once the £12,500 level is reached further increases will be in line with inflation (CPI) rather than with the national minimum wage (NMW) which was the previous intention.
The national insurance secondary (employer) and primary (employee) thresholds will be aligned at £157 per week from April 2017.
The national insurance upper earnings limit and upper secondary threshold will remain aligned with the higher rate threshold for income tax.
Property and trading allowances
Two new £1,000 allowances for property and trading income were announced at Budget 2016, to apply from April 2017. The trading allowance will now also apply to certain miscellaneous income from providing assets or services.
The government also confirmed its commitment to reduce the rate of corporation tax, currently 20%, to 19% in 2017 and to 17% in 2020.