Individual and Small Business Tax Rate Summaries

The 2015/2016 tax year commenced on 6 April 2015.

We have set out below a few points on the impact of a new tax year for individuals, sole traders & partnerships, employers and small businesses.


  • Personal Allowances have increased to £10,600. This is the amount an individual earning less than £100,000 can earn tax free.
  • Individuals earning over £100,000 also have this personal allowance available to them, however it is reduced by £1 for every £2 they earn over £100,000. Therefore anyone earning £121,200 in 2015/16 will have no personal allowances (assuming they were born after 4th April 1948).
  • Personal allowances for individuals born before 6 April 1938 have gone up an extra £60 to £10,660.

 Sole traders and partnerships

  • Many businesses align their accounting year end with the tax year end. If you haven’t already, it is a good opportunity to review margins, reduce costs and increase prices.
  • Although the government proposed to abolish Class 2 National Insurance Contributions, they haven’t set a date yet. The rate has increased by 5p to £2.80 per week.
  • Where profits are below the Small Profits Threshold of £5,965,  individual may elect to apply for the Class 2 Exemption. It may affect your entitlement to state benefits therefore careful thought is required on whether it would be appropriate to apply for this exemption.


  • Ensure End of Year 2014/15 PAYE reporting requirements have been completed and successfully submitted to HMRC.
  • Employee tax codes have to be updated.
  • Review business to consider whether Employment Allowance is applicable. If business is eligible it gets a £2,000 allowance to set off against Employer’s National Insurance Contributions.
  • Employee National Insurance threshold has increased to £155 a week. Therefore an employee can earn up to £155 before they need to pay National Insurance Contributions.
  • Employees under 21 have a new National Insurance Contribution threshold of £815 per week.


  • The VAT registration threshold increased from £81,000 to £82,000. Therefore where your Vatable sales are more than £82,000 a business may have to register for VAT.
  • The VAT deregistration threshold also increased to £80,000, therefore if your business made sales of below £80,000 the business may deregister for VAT.

For further information contact Avery Clifton on 0118 907 9224.

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