Tax and National Insurance 2014/15

Tuesday, December 10th, 2013

HMRC

 

HMRC have published PAYE tax and National Insurance Contributions rates and thresholds that will apply in the 2014/15 tax year:

The following table shows the tax allowances for 2013/14 and 2014/15 tax years:

Tax Allowances

2013/14

2014/15

Change

£

£

£

Personal Allowance
  • People born after 05/04/48

9,440

10,000

+560

  • People born between 06/04/38 and 05/04/48

10,500

10,500

0

  • People born before 06/04/38

10,660

10,660

0

Married Couples’ Allowance* (born before 06/04/35)
  • Maximum

7,915

8,165

+250

  • Minimum

3,040

3,140

+100

Income Limit for Age-Related Allowance
Income Limit for people born before 06/04/48

26,100

27,000

+900

Income Limit (regardless of date of birth or age)

100,000

100,000

0

Blind Person’s Allowance

2,160

2,230

+70

* The tax relief on the Married Couple’s Allowance is restricted to 10%.

The following table shows the tax rates for 2013/14 and 2014/15 tax years:

Tax Rates

2013/14

2014/15

Change

%

%

%

Basic Rate

20

20

0

Higher Rate

40

40

0

Additional Rate

45

45

0

The following table shows the tax bands for 2013/14 and 2014/15 tax years:

Tax Threshold

2013/14

2014/15

Change

£

£

£

Basic

0 – 32,010

0 – 31,865

-145

Higher

32,011 – 150,000

31,866 – 150,000

+145

Additional

Over 150,000

0

The Class 1 weekly NICs thresholds for 2013/14 and 2014/15 are as follows:

NICs Threshold

2013/14

2014/15

Change

£

£

£

Lower Earnings Limit (LEL)

109

111

+2

Primary Threshold (PT)

149

153

+4

Secondary Threshold (ST)

148

153

+5

Upper Accrual Point (UAP)

770

770

0

Upper Earnings Limit (UEL)

797

805

+8

There are no changes to the percentage rates; therefore, the Class 1 NICs rates structure from April 2014 is as follows:

Employer Contributions

Not Contracted-Out

Contracted-Out Salary Related Schemes

Table Letters

A, B, C and J

D, E and L

Earnings up to LEL

NIL

NIL

Earnings between      LEL and ST

0%

0%, less 3.4% rebate

Earnings between       ST and UAP

13.8%

10.4%, i.e. 13.8% less 3.4% rebate

Earnings between     UAP and UEL

13.8%

13.8%

Earnings above UEL

13.8%

13.8%

 

Employee Contributions

Not  Contracted-out

Contracted-Out Salary Related Schemes

Table Letters

A

B

J

D

E

L

Earnings up to LEL

NIL

NIL

NIL

NIL

NIL

NIL

Earnings between    LEL and PT

0%

0%

0%

0% less 1.4% rebate

0%

0% less 1.4% rebate

Earnings between       PT and UAP

12%

5.85%

2%

10.6%, i.e. 12% less 1.4% rebate

5.85%

2%

Earnings between     UAP and UEL

12%

5.85%

2%

12%

5.85%

2%

Earnings above UEL

2%

2%

2%

2%

2%

2%

Comment

Note that the Primary and Secondary thresholds seem to have been realigned, however, the only NICs thresholds that have been published at the time of writing are the weekly thresholds.

We will publish the others when they are confirmed.

Further Information

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4 comments on “Tax and National Insurance 2014/15”


  1. Edward Beefcurtains says:

    £11 per month better off, yay!


  2. Ian Holloway says:

    I would sooner have it in my pocket than put it in the Government’s! Seriously, a friend has calculated that she is also about £11 a month better off as a result of the tax and NICs changes from April 2014. And that amount of money is really valued by her.

    Kind regards


  3. Linda Sutherland says:

    Can you confirm what bandings are included in the contracted out earnings.

    Is it Earnings LEL to PT + Earnings PT to UAP + Earnings UAP to UEL?


  4. Ian Holloway says:

    Hi,

    It is actually more tricky than Not Contracted-Out. When it comes to recording earnings in the payroll system, you are still required to record the 4 thresholds (earnings at the LEL, LEL to PT, PT to UAP and UAP to UEL). When it comes to calculating the Contributions, earnings between the LEL and PT (or ST for the employer) have a rebate amount applied then earnings between the PT (or ST for the employer) to the UAP have a reduced Contributions rate. Standard Contributions are payable on earnings over the UAP.

    Does this help?

    Kind regards,

    Ian

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