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saver

Protect your personal

allowance.

In 2016/17

your personal allowance

of £11,000 is reduced by

50p for every pound your

income is over £100,000.

If you can reduce your

income below £100,000,

e.g. by making a pension

contribution or charitable

gift, you should benefit

from the full allowance.

£

BUDGET

16 MARCH 2016

PERSONAL TAXATION

Income tax and National Insurance contributions

The personal allowance will increase to £11,500 and the higher

rate threshold will rise to £45,000 for 2017/18. The National

Insurance contribution (NIC) upper earnings limit will also

increase to remain aligned with the higher rate threshold.

Employment allowance – employing illegal workers

One year’s employment allowance (worth up to £3,000 of NICs in

2016/17) will be removed from employers who are charged civil

penalties by the Home Office for employing illegal workers from

April 2018.

Property and trading allowances

From April 2017 there will be a new £1,000 allowance for

property income and also a £1,000 allowance for trading income.

Individuals with property income or trading income within this

allowance will no longer need to declare or pay tax, and they can

choose to pay tax on the excess income over the allowance rather

than calculate their actual profit.

Termination payments

From April 2018, employment termination payments over £30,000

liable to income tax will also be subject to employers’ NICs.

Restriction on landlords’ interest relief

The phased restriction of tax relief on interest payments by

residential property landlords will start in April 2017 as already

legislated. Finance Bill 2016 will make some clarifications and

amendments to ensure it operates as intended. So beneficiaries

of deceased persons’ estates will be entitled to the basic rate tax

reduction.

Sporting testimonials

From April 2017 there will be an exemption of £100,000 (not

£50,000 as suggested in the 2015 Autumn Statement) for employed

sportspersons on income from sporting testimonials that are not

contractual or customary.

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