The 2016/2017 Tax Year In A Nutshell – Refresher For Your Tax Return


Need to submit your 2016/2017 tax return? Here’s a refresher on what the thresholds and personal allowances are for the last tax year.

6 Changes in the 2016/2017 Tax Year

1. Changes in personal allowance

• From the current level of £11,000, the personal allowance will rise to £11,500.
• From £43,000, the threshold for paying for 40pc, higher-rate tax, will increase up to £45,000.
• When you earn £100,000, you begin to lose your personal allowance.
• When you earn £123,000 or more, your personal allowance threshold will be reduced to zero.
• National Insurance will have a £2 increase. Once you earn £157 a week, the 12pc charge will be deducted.
• Higher earners will pay the 12pc rate on the bulk of their income, what with the upper limit increased to £866 a week from £827.
• High earners, with income over £150,000, can rest easy because the level of which they have to pay additional rate, 45pc tax, is the same.

These changes will mean an estimated 400,000 people will be taken out of tax altogether, the government said.

2. ISA allowance will rise to £20,000 from the current £15,240

3. LISA or Lifetime ISA is launched, which will help people buy pensions and ISA, starting at £4,000 a year.

4. Rules on ‘Inheritable’ ISA’s are to be relaxed and improved.

5. Tax perks for buy-to-let investors will be removed. They can no longer offset the full cost of their mortgage interest against the rental fees.

6. A £1m inheritance may now be passed on tax-free, as family homes get inheritance tax breaks.

Think you’ve been overtaxed? Find out if you’re owed some tax back here

Translate »