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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
 

Income tax bands and rates

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:
Enterprise Investment Scheme (EIS)
EIS, where amounts over £1m invested in 'knowledge-intensive companies
Seed EIS (SEIS) 
Venture Capital Trust (VCT)
Social Investment Tax Relief (SITR)

 
£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:
Less than total income (incl. exempt) x
OR, less than
LCT rate (reduce by 1% first 12 months of registration)

 
 
2%
£250
16.5%
 
  
2%
£250
16.5%

Partial exemption de-minimis:

Recover VAT if input VAT attributable to exempt supplies is:
on average less than
and, as a proportion of total input VAT is no more than

 
 
£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%
 

Stamp Duty Land Tax - residential property

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%

 


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