A summary of key tax rates and allowances for 2021-22 and 2020-21.
Income Tax
Income Tax
|
Personal allowances |
2021-22 |
2020-21 |
| Personal allowance (PA) | £12,570 | £12,500 |
| PA restricted by £1 for every £2 of income over | £100,000 | £100,000 |
| Transferable tax allowance for certain married couples | £1,260 | £1,250 |
| Blind person's allowance | £2,520 | £2,500 |
| Married couples' allowance (at least one born pre 6 Apr 1935): Maximum (relief given at 10%) Minimum (relief given at 10%) |
£9,125 £3,530 |
£9,075 £3,510 |
|
Other allowances |
2021-22 |
2020-21 |
| Personal savings allowance: Basic rate Higher rate Top rate |
£1,000 £500 £0 |
£1,000 £500 £0 |
| Maximum savings starting rate (non-savings income < PA) Reduces by £1 for every £1 of non-savings income > PA |
£5,000 |
£5,000 |
| Dividends allowance | £2,000 | £2,000 |
| Rent-a-room allowance | £7,500 | £7,500 |
| Trading allowance | £1,000 | £1,000 |
| Property allowance | £1,000 | £1,000 |
|
2021-22 |
2020-21 |
|
| Basic rate band: Savings Non-savings Dividends Gift aid and pension contributions can extend basic rate band |
£37,700 20% 20% 7.5% |
£37,500 20% 20% 7.5% |
| Higher rate band: Savings Non-savings Dividends |
£37,701-£150,000 40% 40% 32.5% |
£37,501-£150,000 40% 40% 32.5% |
| Higher rate band: Savings Non-savings Dividends |
£150,000+ 45% 45% 38.1% |
£150,000+ 45% 45% 38.1% |
| Rates applicable to trusts: Savings Non-savings Dividends |
45% 45% 38.1% |
45% 45% 38.1% |
|
Non-domicile remittance basis charge (RBC) |
2021-22 |
2020-21 |
| De minimis unremitted foreign income and gains | £2,000 | £2,000 |
| UK resident 7 of last 9 tax years RBC | £30,000 | £30,000 |
| UK resident 12 of last 14 tax years RBC | £60,000 | £60,000 |
| UK resident 17 of last 20 tax years RBC | N/A | N/A |
| UK resident 15 of last 20 tax years RBC | Deemed domiciled | Deemed domiciled |
|
Child benefit |
2021-22 |
2020-21 |
| One child (per week) | £21.15 | £21.05 |
| Additional children (per week) | £14.00 | £13.95 |
| Reduced by 1% for every £100 of income over | £50,000 | £50,000 |
| Child benefit fully repayable if income over | £60,000 | £60,000 |
Savings & investments
|
ISA |
2021-22 |
2020-21 |
| ISA annual limit (cash and shares combined) | £20,000 | £20,000 |
| Lifetime ISA annual limit | £4,000 | £4,000 |
| Lifetime ISA withdrawal charge | 20% | 20% |
| Help to buy ISA limit per month, initial month extra £1,000 | £200 | £200 |
| Junior ISA annual limit | £9,000 | £9,000 |
|
Venture capital |
2021-22 |
2020-21 |
|
Maximum individual investment: |
£1,000,000 £2,000,000 £100,000 £200,000 £1,000,000 |
£1,000,000 £2,000,000 £100,000 £200,000 £1,000,000 |
| Maximum income tax reduction: EIS SEIS VCT SITR test |
30% 50% 30% 30% |
30% 50% 30% 30% |
|
Pensions |
2021-22 |
2020-21 |
| Lifetime allowance Excess taxed at: 55% for cash drawn 25% for income drawn |
£1,073,100 |
£1,073,100 |
| Annual allowance maximum | £40,000 | £40,000 |
| Annual allowance minimum | £4,000 | £4,000 |
| Maximum tax-relieved contributions with no relevant earnings | £3,600 | £3,600 |
| Money purchase annual allowance | £4,000 | £4,000 |
CGT
|
Exemptions |
2021-22 |
2020-21 |
| Annual exemption for individuals | £12,300 | £12,300 |
| Annual exemption for trusts generally | £6,150 | £6,150 |
| Chattels max gain 5/3rds x proceeds less exempt amount of... | £6,000 | £6,000 |
|
Rates |
2021-22 |
2020-21 |
| Individuals: Basic rate Above basic rate Additional surcharge applicable to residential property gains |
10% 20% 8% |
10% 20% 8% |
| Trusts Additional surcharge applicable to residential property gains |
20% 8% |
20% 8% |
| Companies | See corporation tax | |
|
Reliefs |
2021-22 |
2020-21 |
| Business Asset Disposal Relief - qualifying lifetime limit | £1,000,000 | £1,000,000 (from 11/3/2020) |
| Investors' Relief - qualifying lifetime limit | £10,000,000 | £10,000,000 |
| Both reliefs result in CGT at 10% on qualifying gains | ||
IHT
|
Exemptions and nil rates |
2021-22 |
2020-21 |
| Nil rate band | £325,000 | £325,000 |
| Residence nil rate band | £175,000 | £175,000 |
| Maximum at nil rate including nil rate band transfers from spouse | £1,000,000 | £1,000,000 |
|
Rates |
2021-22 |
2020-21 |
| Chargeable lifetime transfers | 20% | 20% |
| Transfers on, or within seven years of, death (excess over nil rate band) | 40% | 40% |
| Transfers on death, where 10% or more left to charity | 36% | 36% |
| Taper relief on IHT payable for gifts made within seven years of death |
0 - <3 years 3 - <4 years 4 - <5 years 5 - <6years 6 - <7 years More than 7 years |
0% 20% 40% 60% 80% Exempt |
|
Exemptions |
2021-22 |
2020-21 |
| Gifts to UK domiciled spouse (or non-dom with domicile election) | Unlimited | Unlimited |
| Gifts to non-domiciled spouse (additional to nil rate band) | £325,000 | £325,000 |
| Annual exemption (per donor): can be carried forward one year | £3,000 | £3,000 |
| Small gifts exemption (per donee) | £250 | £250 |
| Wedding gift from parent | £5,000 | £5,000 |
| Wedding gift from grandparent | £2,500 | £2,500 |
| Wedding gift from others | £1,000 | £1,000 |
| Regular gifts out of income | Unlimited | Unlimited |
| Business property relief: Controlling interest in listed company Personal assets used by partnership or company you control Interest in a trading business Shares in an unquoted trading company (including AIM-listed) |
50% relief 50% relief 100% relief 100% relief |
50% relief 50% relief 100% relief 100% relief |
| Agricultural property relief (applicable to agricultural value) | 100% relief | 100% relief |
VAT
|
VAT |
2021-22 |
2020-21 |
| Registration threshold (taxable turnover, i.e. excl. exempt) | £85,000 | £85,000 |
| Deregistration threshold | £83,000 | £83,000 |
| Rates: Standard Reduced Zero |
20% 5% 0% |
20% 5% 0% |
| Fractions: Standard Reduced |
1 / 6 1 / 21 |
1 / 6 1 / 21 |
| Cash accounting & annual accounting: Taxable turnover upper limit for joining Taxable turnover upper limit for leaving |
£1,350,000 £1,600,000 |
£1,350,000 £1,600,000 |
| Flat rate scheme: Taxable turnover upper limit for joining Anniversary test: leave if total income (incl. exempt) greater than stay if total income in next 12 months will be less than |
£150,000 £230,000 £191,500 |
£150,000 £230,000 £191,500 |
|
Flat rate scheme limited cost trader (LCT): LCT applies if spend on relevant goods in the quarter is: |
2% £250 16.5% |
2% £250 16.5% |
|
Partial exemption de-minimis: Recover VAT if input VAT attributable to exempt supplies is: |
£625 per month 50% |
£625 per month 50% |
Stamp Duties & ATED
|
Stamp Duty |
2021-22 |
2020-21 |
| Newly issued shares | 0% | 0% |
| Stocks and marketable securities with consideration over £1,000 | 0.5% | 0.5% |
|
2021-22 |
2020-21 |
|
|
First time buyers where cost of property < £500,000: £0 - £300,000 £300,000 - £500,000 If the cost is more than £500,000 then the normal rates apply. |
0% 5% |
0% 5% |
| £0 - £125,000 | 0% | 0% |
| £125,001 - £250,000 | 2% | 2% |
| £250,001 - £925,000 | 5% | 5% |
| £925,001 - £1,500,000 | 10% | 10% |
| £1,500,001 + | 12% | 12% |
| Note: owing to Coronavirus, the nil rate of SDLT is extended to £500,000 from 8 July 2020 to 30 June 2021. The nil rate will then fall to £250,000 until 30 September 2021 before returning to £125,000 as above. | ||
| Supplement for second home/buy to let and companies Not applicable if consideration less than |
3% £40,000 |
3% £40,000 |
| Higher rate for non-natural person with non-qualifying activity (applies to companies, partnerships with a company partner and collective investment schemes) |
15% if >£500,000 |
15% if >£500,000 |
| Surcharge for non-UK residents | 2% | N/A |
|
Stamp Duty Land Tax - non-residential or mixed property |
2021-22 |
2020-21 |
| £0 - £150,000 | 0% | 0% |
| £150,001 - £250,000 | 2% | 2% |
| £250,001 + | 5% | 5% |
|
Annual Tax on Enveloped Dwellings |
2021-22 |
2020-21 |
| Applies if market value on valuation date exceeds | £500,000 | £500,000 |
| Valuation dates | 1 April 2017 | 1 April 2017 |
| Annual charge if taxable value is £500,001 - £1,000,000 | £3,700 | £3,700 |
| £1,000,001 - £2,000,000 | £7,500 | £7,500 |
| £2,000,001 - £5,000,000 | £25,300 | £25,200 |
| £5,000,001 - £10,000,000 | £59,100 | £58,850 |
| £10,000,001 - £20,000,000 | £118,600 | £118,050 |
| £20,000,001 + | £237,400 | £236,250 |
Corporation Tax & Capital Allowances
|
Corporation Tax |
2021-22 |
2020-21 |
| Rate | 19% | 19% |
| S455 tax on loans to participators | 32.5% | 32.5% |
|
Patent box and R&D |
2021-22 |
2020-21 |
| Patent box effective rate | 10% | 10% |
| Research and development (R&D) capital expenditure relief | 100% | 100% |
| R&D total enhanced deduction for SMEs | 230% | 230% |
| R&D tax credit rate on surrendable loss for SMEs | 14.5% | 14.5% |
| R&D large company above the line credit | 13% | 13% |
|
Capital allowances |
2021-22 |
2020-21 |
| Annual Investment Allowance (100%) up to | £1,000,000 to 31 December 2021, then £200,000 | £1,000,000 |
| Super deduction (expenditure between 1 April 2021 and 31 March 2023) | 130% | N/A |
| Super deduction (special rate assets) | 50% | N/A |
| Plant and machinery general pool writing down allowance (WDA) | 18% | 18% |
| Integral features and certain long-life assets WDA | 6% | 6% |
| Small pool WDA where balance <£1,000 | 100% | 100% |
| FYA for electric charge-points | 100% | 100% |
| Structures and buildings allowance (SBA) | 3% | 3% |
|
Capital allowance - cars |
2021-22 |
2020-21 |
| New and unused with CO2 emissions of 0g/km | 100% | 100% |
| New and unused with CO2 emissions of up to 50g/km | 18% | 100% |
| New and second hand up to 110g/km | 6% | 18% |
| New and second hand above 110g/km | 6% | 6% |
| Include cars used by sole traders or partnerships with private use in a single asset pool | ||
National Insurance
National Insurance Contributions
Class 1 (Employers & Employees)
|
2021-22 |
2020-21 |
|||
| Employee | Employer | Employee | Employer | |
| Main NIC rate | 12% | 13.8% | 12% | 13.8% |
| No NIC on first | £184 pw | £170 pw | £183 pw | £169 pw |
| Main rate charged up to | £967 pw | No limit | £962 pw | No limit |
| 2% on earnings above | £967 pw | N/A | £962 | N/A |
| Employment allowance per business* | N/A | £4,000 | N/A | £4,000 |
* Certain businesses do not qualify e.g. sole director companies and employers with an employer’s Class 1 NIC liability of £100,000 or more.
Self-employed (TBA for 2021/22)
| 2021-22 | 2020-21 | |
| Class 2 (Self employed) | ||
| Flat rate per week | £3.05 | £3.05 |
| Small profits threshold | £6,515 | £6,475 |
| Class 3 (Voluntary) | ||
| Flat rate per week | £15.40 | £15.30 |
| Class 4 (Self employed) | ||
| On profits £9,568 to £50,270 | 9.0% | 9.0% |
| On profits over £50,270 | 2.0% | 2.0% |
Are you enjoying our content?
Thousands of accountants and advisers and their clients use rossmartin.co.uk as their primary TAX resource.
Register now to receive our FREE weekly SME Tax News update
