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Personal Income Tax Rates and Bands

Income Tax Rates and Bands                                  

2021/22

 2020/21

Band Rate Band Rate 
£0 - £37,70020%£0 - £37,50020%
£37,701 - £150,00040%£37,501 - £150,00040%
Over £150,00045%Over £150,00045%


Savings income (2021/22 and 2020/21)

Savings allowance basic rate£1,000
Savings allowance higher rate£500

A starting rate of 0% may be available unless taxable non-savings income exceeds £5,000.


Dividend income (2021/22 and 2020/21)

Dividend allowance£2,000
Dividend ordinary rate7.5%
Dividend upper rate32.5%
Dividend additional rate38.1%


Income Tax Allowances                                                                           


2021/22
2020/21
Personal allowance£12,570£12,500
Personal allowance income limit£100,000£100,000
Marriage allowance£1,260£1,250
Married couple’s allowance£9,125£9,075
                              - minimum amount£3,530£3,510
                              - income limit£30,400£30,200
Blind person’s allowance£2,520£2,500


Individual Savings Accounts                                                                                                       


2021/22
2020/21
Overall investment limit£20,000£20,000
Junior account investment limit£9,000£9,000
 

Capital Gains Tax

Individuals2021/222020/21
Exemption£12,300£12,300
Standard rate10%10%
Higher/additional rate20%20%
Trusts
Exemption

£6,150

£6,150
Rate20%20%

Higher rates (18/28%) may apply to the disposal of certain residential property interest.

Capital gains tax due from the disposal of UK residential property must be paid to HMRC within 30 days of date of disposal.


Business Asset Disposal Relief

The first £1m of qualifying gains are charged at 10%.


Inheritance Tax

Death rateLifetime rateChargeable transfers
2021/22 and 2020/21
NilNil0 - £325,000 (nil rate band)
40%20%Over £325,000

A further nil rate band of £175,000 may be available in relation to current or former residences.


National Insurance - 2021/22 Class 1 (employed) rates

Employee                                   Employer
Earnings per week        %          Earnings per week          %

Up to £184                    Nil         Up to £170                     Nil
£184.01 - £967             12           Over £170                    13.8
Over £967                      2

Entitlement to contribution-based benefits for employees retained for earnings between £120 and £184 per week. The employer rate is 0% for employees under 21 and apprentices under 25 on earnings up to £967 per week.

Class 1A (employers)       13.8% on employee taxable benefits
Class 1B (employers)       13.8% on PAYE Settlement Agreements
Class 2 (self-employed)   flat rate per week £3.05 - small profits threshold £6,515 per annum
Class 3 (voluntary)            flat rate per week £15.40
Class 4 (self-employed)   9% on profits between £9,568 and £50,270 plus 2% on profits over £50,270


Selected Rates


Weekly benefit
2021/22
£
2020/21
£
Basic State Pension137.60134.25
New State Pension179.60175.20
Statutory pay standard rates

   - average weekly earnings £120 (£120) or over                    
Sick Pay96.3595.85
Maternity/Adoption Pay151.97151.20
Shared Parental Pay151.97151.20
Paternity Pay151.97151.20


National Living Wage and National Minimum Wage

Age                               NLW      21-22     18-20    16-17     Apprentices
From 1 April 2021      £8.91     £8.36      £6.56     £4.62    £4.30

Applies to apprentices under 19, or 19 and over in the first year of apprenticeship. NLW applies to those aged 23 and over.


Tax Reliefs For Individuals

Enterprise Investment Scheme (EIS)
Relief on investments in certain unquoted trading companies up to £1m per annum (£2m for knowledge intensive companies):
  • Income tax relief at 30% • Capital gains exemption on disposal
Unlimited amounts of capital gains from the disposal of other assets may be able to be deferred by making an EIS investment.

Seed Enterprise Investment Scheme (SEIS)
Relief on investments in certain unquoted trading companies up to £100,000 per annum:
  • Income tax relief at 50% • Capital gains exemption on disposal
Capital gains from the disposal of other assets may be exempt up to £50,000 per annum by making an SEIS investment.

Venture Capital Trusts (VCTs)
Relief on investments in certain quoted companies up to £200,000 per annum:
  • Income tax relief at 30% • Capital gains exemption on disposal
Dividends received from VCTs may be exempt from income tax. All reliefs subject to detailed conditions being met.
         

Pensions                                                                                      


2021/222020/21
Lifetime Allowance limit£1,073,100£1,073,100
Annual Allowance limit£40,000£40,000
Money Purchase Annual Allowance£4,000£4,000


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