UK Tax allowances and thresholds for 2021 – 2022

UK Tax allowances and thresholds for 2021 – 2022

INCOME TAX                                                                         

 

Main personal allowances and reliefs

21/22

20/21

Personal allowance*

£12,570

£12,500

Marriage/civil partner’s transferable allowance

Married couple’s/civil partner’s allowance at 10%

£1,260

£1,250

(if at least one born before 6/4/35) – maximum

£9,125

£9,075

– minimum

£3,530

£3,510

Blind person’s allowance

£2,520

£2,500

Rent-a-room relief

£7,500

£7,500

Property allowance and trading allowance (each)

£1,000

£1,000

*Personal allowance reduced by £1 for every £2 of adjusted net income over £100,000

Married couple’s/civil partner’s allowance reduced by £1 for every £2 of adjusted net income over £30,400 (£30,200 for 20/21), until minimum reached

UK taxpayers excluding Scottish taxpayers’

21/22

20/21

non-dividend, non-savings income

   

20% basic rate on first slice of taxable income up to

£37,700

£37,500

40% higher rate on next slice of taxable income over

£37,700

£37,500

45% additional rate on taxable income over

£150,000

£150,000

Scottish taxpayers – non-dividend, non-savings income

19% starter rate on taxable income up to                                 £2,097

£2,085

20% basic rate on next slice up to                                              £12,726

£12,658

21% intermediate rate on next slice up to                                 £31,092

£30,930

41% higher rate on next slice up to                                             £150,000

£150,000

46% top rate on income over                                                      £150,000

£150,000

All UK taxpayers

 

Starting rate at 0% on band of savings income up to**       £5,000

£5,000

Personal savings allowance at 0%: Basic rate                         £1,000

£1,000

Higher rate                                                                                        £500

£500

Additional rate                                                                                 £0

£0

Dividend allowance at 0%:                             All individuals      £2,000

£2,000

Tax rates on dividend income:                      Basic rate             7.5%

7.5%

Higher rate                                                                                         32.5%

32.5%

Additional rate                                                                                  38.1%

38.1%

Trusts: Standard rate band generally                                         £1,000

£1,000

Rate applicable to trusts:                                Dividends             38.1%

38.1%

Other income                                                                                    45%

45%

**Not available if taxable non-savings income exceeds the starting rate band

High Income Child Benefit Charge, 1% of benefit per £100 of adjusted net income between £50,000 – £60,000

REGISTERED PENSIONS                                                          

 

 

21/22

20/21

Lifetime allowance

£1,073,100

£1,073,100

Money purchase annual allowance

£4,000

£4,000

Annual allowance*

£40,000

£40,000

Annual allowance charge on excess is at applicable tax rate(s) on earnings Lifetime allowance charge if excess is drawn as cash 55%; as income 25% Pension commencement lump sum up to 25% of pension benefit value

*Reduced by £1 for every £2 of adjusted income over £240,000 to a minimum of £4,000, subject to threshold income being over £200,000

STATE PENSIONS                                                                   

                                                                                                                                         Annual      Weekly                                     New state pension – where state pension age reached after 5/4/16            £9,339.20       £179.60

Basic state pension – single person*                                                                     £7,155.20       £137.60

Basic state pension – spouse/civil partner*                                                         £4,287.40      £82.45

*State pension age reached before 6/4/16

TAX INCENTIVISED INVESTMENT                                              

 

Total Individual Savings Account (ISA)

21/22

20/21

limit excluding Junior ISAs (JISAs)

£20,000

£20,000

Lifetime ISA

£4,000

£4,000

JISA and Child Trust Fund

£9,000

£9,000

Venture Capital Trust (VCT) at 30%

£200,000

£200,000

Enterprise Investment Scheme (EIS) at 30%*

£2,000,000

£2,000,000

EIS eligible for CGT deferral relief

No limit

No limit

Seed EIS (SEIS) at 50%

£100,000

£100,000

SEIS CGT reinvestment relief

50%

50%

*Above £1,000,000 investment must be in knowledge-intensive companies

NATIONAL INSURANCE CONTRIBUTIONS                                    

 

Class 1

Employee

Employer

NICs rate

12%

13.8%

No NICs for employees generally on the first

£184 pw

£170 pw

No NICs for younger/veteran employees* on the first

£184 pw

£967 pw

NICs rate charged up to

£967 pw

No limit

2% NICs on earnings over

£967 pw

N/A

Employment Allowance

 

£4,000

Per business – not available if sole employee is a director or employer’s NICs for 20/21 £100,000 or more

Limits and Thresholds

Weekly

Monthly

Annual

Lower earnings limit

£120

£520

£6,240

Primary threshold

£184

£797

£9,568

Secondary threshold

£170

£737

£8,840

Upper earnings limit

(and upper secondary thresholds*)

 

£967

 

£4,189

 

£50,270

*Employees generally under 21 years and apprentices under 25 years. Veterans in first 12 months of civilian employment from April 2021.

Class 1A Employer

On car and fuel benefits and most other taxable benefits provided to employees and directors:               13.8%

Class 2 Self-employed                                                                                                   Flat rate per week:                 £3.05 (£158.60 pa)

Small profits threshold.                     No compulsory NICs if annual profits less than:                         £6,515

Class 4 Self-employed                                                  On annual profits of :        £9,568 to £50,270: 9%     Over £50,270: 2%

Class 3                                                                             Voluntary flat rate per week:                                          £15.40 (£800.80 pa)

Tax Rates – Individuals

21/22

20/21

Below UK higher rate income tax band

10%

10%

Within UK higher and additional rate income tax

bands 20%

20%

Tax Rate – Trusts and Estates

20%

20%

Surcharge for residential property and carried interest:      8%

Annual exempt amount: Individuals, estates, etc:                   £12,300

8%

£12,300

Trusts generally:                                                                               £6,150

£6,150

Chattels gain limited to 5⁄3 rds of proceeds exceeding:       £6,000

£6,000

CAPITAL GAINS TAX                                                               

Exemptions

 

Business Asset Disposal Relief

10% on lifetime limit of £1,000,000

For trading businesses and companies (minimum 5% participation) held for at least 2 years

INHERITANCE TAX                                                                  

 

 

21/22

20/21

Nil-rate band*

£325,000

£325,000

Residence nil-rate band*

£175,000

£175,000

Rate of tax on excess

40%

40%

Rate if at least 10% of net estate left to charity

36%

36%

Lifetime transfers to and from certain trusts

20%

20%

Overseas domiciled spouse/civil partner exemption

£325,000

£325,000

100% relief:    businesses, unlisted/AIM companies, certain farmland/ buildings

50% relief:     certain other business assets e.g. farmland let before 1/9/95

Annual exempt gifts of:       £3,000 per donor               £250 per donee

Tapered tax charge on lifetime gifts within 7 years of death

Years between gift and death        0–3       3–4      4–5       5–6       6–7

% of death tax charge                         100        80        60         40        20

*Up to 100% of the unused proportion of a deceased spouse’s/civil partner’s nil-rate band and/or residence nil-rate band can be claimed on the survivor’s death

Estates over £2,000,000: the value of the residence nil-rate band is reduced by 50% of the excess over £2,000,000

 

STAMP DUTIES AND PROPERTY TRANSACTION TAXES                

Stamp Duty and SDRT: Stocks and marketable securities              0.5%

Additional residential and all corporate residential properties

£40,000 or more – add 3% to SDLT rates and 4% to LBTT and LTT rates

England & N Ireland – Stamp Duty Land Tax (SDLT) on slices of value

Residential property

%

Commercial property

%

Up to £125,000*

0

Up to £150,000

0

£125,001*–£250,000*

2

£150,001–£250,000

2

£250,001*–£925,000

5

Over £250,000

5

£925,001–£1,500,000

10

   

Over £1,500,000

12

   

*0% on slice up to £500,000 (8/7/20–30/6/21) and £250,000 (1/7/21–30/9/21)

First time buyers:     0% on first £300,000 for properties up to £500,000

Non-resident purchasers:     2% surcharge on properties £40,000 or more

Residential properties bought by companies etc over £500,000:     15% of total consideration, subject to certain exemptions

Scotland – Land and Buildings Transaction Tax (LBTT) on slices of value

Residential property

%

Commercial property

%

(from 1/4/21)

     

Up to £145,000

0

Up to £150,000

0

£145,001–£250,000

2

£150,001–£250,000

1

£250,001–£325,000

5

Over £250,000

5

£325,001–£750,000

10

   

Over £750,000

12

   

First time buyers: 0% on the first £175,000

Wales – Land Transaction Tax (LTT) on slices of value

Residential property

%

Commercial property

%

Up to £180,000*

0

Up to £225,000

0

£180,001*–£250,000*

3.5

£225,001–£250,000

1

£250,001–£400,000

5

£250,001–£1,000,000

5

£400,001–£750,000

7.5

Over £1,000,000

6

£750,001–£1,500,000

10

   

Over £1,500,000

12

   

*0% on slice up to £250,000 to 30/6/21

 

MAIN DUE DATES FOR TAX PAYMENTS                                      

Income Tax, NICs and Capital Gains Tax – Self-Assessment

31 Jan in tax year                Normally 50% of previous year’s income tax

Following 31 July }    (less tax deducted at source) and class 4 NICs

Following 31 Jan                      Balance of income tax and class 4 NICs, class 2 NICs and balance of CGT

Inheritance Tax

On death:                  Normally 6 months after end of month of death Lifetime transfer 6 April–30 September:                 30 April in following year Lifetime transfer 1 October–5 April: 6 months after month of transfer

Corporation Tax – Self Assessment

  • Profits under £1,500,000: 9 months + 1 day after end of accounting period
  • Profits £1,500,000 or over: normally payable in 7th, 10th, 13th and 16th months after start of the accounting period
  • Profits £20,000,000 or over: normally payable in 3rd, 6th, 9th and 12th months after start of the accounting period
  • Growing companies: no instalments where profits are £10,000,000 or less and the company was not a large company for the previous
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