UK Income Tax Calculator 2015-16
Calculate your income tax liability for the 2015-16 tax year with our accurate tool
Your 2015-16 Tax Calculation
Comprehensive Guide to UK Income Tax Calculation for 2015-16
The 2015-16 tax year (6 April 2015 to 5 April 2016) introduced several important changes to the UK tax system. This guide provides a detailed explanation of how income tax was calculated during this period, including tax rates, allowances, and special considerations.
Key Tax Rates and Thresholds for 2015-16
The 2015-16 tax year maintained the progressive tax system with three main rates:
- Basic rate: 20% on annual earnings above the personal allowance up to £31,785
- Higher rate: 40% on annual earnings from £31,786 to £150,000
- Additional rate: 45% on annual earnings above £150,000
Personal Allowance Changes
For 2015-16, the standard personal allowance increased to £10,600. This was a significant rise from the previous year’s £10,000 allowance. The personal allowance began to reduce by £1 for every £2 earned over £100,000, reaching zero at £121,200.
| Income Range | Tax Rate | Effective Tax Rate |
|---|---|---|
| £0 – £10,600 | 0% | 0% |
| £10,601 – £31,785 | 20% | 20% |
| £31,786 – £100,000 | 40% | 40% |
| £100,001 – £121,200 | 40% + 1% for every £2 over £100k | 60% |
| £121,201 – £150,000 | 40% | 40% |
| Over £150,000 | 45% | 45% |
Special Allowances and Deductions
Several special allowances could reduce taxable income in 2015-16:
- Blind Person’s Allowance: £2,290 (increased from £2,230 in 2014-15)
- Married Couple’s Allowance: Available to couples where at least one partner was born before 6 April 1935, with a maximum reduction of £835.50
- Marriage Allowance: Introduced in 2015-16, allowing transfer of 10% of personal allowance (£1,060) between spouses
- Enterprise Investment Scheme (EIS): 30% income tax relief on investments up to £1 million
- Seed Enterprise Investment Scheme (SEIS): 50% income tax relief on investments up to £100,000
National Insurance Contributions
For 2015-16, National Insurance contributions were calculated as follows:
- Class 1 (Employees):
- 12% on weekly earnings between £155 and £815
- 2% on weekly earnings above £815
- Class 4 (Self-employed):
- 9% on annual profits between £8,060 and £42,385
- 2% on annual profits above £42,385
Student Loan Repayments
Student loan repayment thresholds for 2015-16 were:
| Plan Type | Repayment Threshold | Repayment Rate |
|---|---|---|
| Plan 1 (pre-2012) | £17,335 per year | 9% of income above threshold |
| Plan 2 (post-2012) | £21,000 per year | 9% of income above threshold |
Pension Contributions and Tax Relief
Pension contributions received tax relief at the individual’s highest marginal rate in 2015-16. The annual allowance for pension contributions was £40,000, with a lifetime allowance of £1.25 million.
For high earners (income over £150,000), the annual allowance began to taper by £1 for every £2 of income over £150,000, down to a minimum of £10,000.
Dividend Taxation Changes
2015-16 maintained the dividend tax credit system that would be abolished in 2016-17. Dividends were taxed as follows:
- Basic rate taxpayers: 10% (effectively 0% after 10% tax credit)
- Higher rate taxpayers: 32.5% (effectively 25% after tax credit)
- Additional rate taxpayers: 37.5% (effectively 30.56% after tax credit)
Scottish Tax Differences
While Scotland had some devolved tax powers in 2015-16, income tax rates and bands remained aligned with the rest of the UK. The Scottish Rate of Income Tax (SRIT) would not come into effect until 2016-17.
Common Tax Calculation Mistakes to Avoid
When calculating 2015-16 taxes, individuals often made these errors:
- Forgetting to account for the personal allowance reduction for incomes over £100,000
- Incorrectly applying marriage allowance (only available to basic rate taxpayers)
- Miscounting pension contributions when calculating taxable income
- Overlooking blind person’s allowance or other special allowances
- Misapplying student loan repayment thresholds based on plan type
- Incorrectly calculating National Insurance contributions for multiple employments
Historical Context and Economic Factors
The 2015-16 tax year occurred during a period of economic recovery following the 2008 financial crisis. Key economic indicators for this period included:
- UK GDP growth of 2.2%
- Unemployment rate of 5.4% (down from 7.5% in 2013)
- Inflation rate (CPI) of 0.1%
- Average weekly earnings growth of 2.1%
These economic conditions influenced tax policy, with the government focusing on:
- Increasing the personal allowance to reduce tax for lower earners
- Maintaining the higher rate threshold to avoid fiscal drag
- Introducing the marriage allowance to support families
- Keeping corporation tax competitive at 20% (down from 28% in 2010)
Comparison with Previous and Subsequent Years
| Tax Year | Personal Allowance | Basic Rate Limit | Higher Rate Threshold | Additional Rate |
|---|---|---|---|---|
| 2014-15 | £10,000 | £31,865 | £41,865 | 45% (over £150,000) |
| 2015-16 | £10,600 | £31,785 | £42,385 | 45% (over £150,000) |
| 2016-17 | £11,000 | £32,000 | £43,000 | 45% (over £150,000) |
Authoritative Resources
For official information about 2015-16 income tax calculations, consult these authoritative sources:
- GOV.UK: Income Tax rates and allowances (2015-16)
- Institute for Fiscal Studies: 2015 Budget analysis
- University of Warwick: UK Tax Law in 2015-16
Frequently Asked Questions
What was the emergency tax code for 2015-16?
The emergency tax code for 2015-16 was 1060L, which was also the standard tax code for most employees.
How was the marriage allowance claimed in 2015-16?
The marriage allowance could be claimed online through the GOV.UK website or by calling HMRC. The lower-earning partner needed to earn less than £10,600 to be eligible to transfer 10% of their personal allowance.
What was the deadline for submitting a 2015-16 self-assessment tax return?
For online returns, the deadline was 31 January 2017. Paper returns needed to be submitted by 31 October 2016.
How were savings income taxed in 2015-16?
Savings income was taxed at 20% for basic rate taxpayers, 40% for higher rate, and 45% for additional rate. The first £1,000 of savings income was tax-free for basic rate taxpayers (£500 for higher rate).
What was the capital gains tax allowance for 2015-16?
The annual exempt amount for capital gains tax was £11,100 for individuals and £5,550 for most trusts.