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Income Tax
Rates and bands (other than savings and dividend income)
| 2021/22 | 2020/21 | ||
|---|---|---|---|
| Band £ | Rate % | Band £ | Rate % |
| 0 – 37,700 | 20 | 0 – 37,500 | 20 |
| 37,701 – 150,000 | 40 | 37,701 – 150,000 | 40 |
| Over 150,000 | 45 | Over 150,000 | 45 |
Income tax rates in Scotland and Wales on income other than savings and dividend income have been devolved.
| 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 rate | 7.5% |
| Dividend upper rate | 32.5% |
| Dividend additional rate | 38.1% |
Income Tax Reliefs
| 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 |
Pensions
| 2021/22 | 2020/21 | |
| Lifetime Allowance limit | £1,073,100 | £1,073,100 |
| Annual Allowance limit | £40,000 | £40,000 |
| Money Purchase Annual Allowance | £4,000 | £4,000 |
Developed tax income
Scotland rates and bands
| 2021/22 | 2020/21 | ||
|---|---|---|---|
| Band £ | Rate % | Band £ | Rate % |
| 0 – 2,097 | 19 | 0 – 2,085 | 19 |
| 2,098 – 12,726 | 20 | 2,086 – 12,658 | 20 |
| 12,727 – 31,092 | 21 | 12,659 – 30,930 | 21 |
| 31,093 – 150,000 | 41 | 31,093 – 150,000 | 41 |
| Over 150,000 | 46 | Over 150,000 | 46 |
Wales rates and bands
| 2021/22 | 2020/21 | ||
|---|---|---|---|
| Band £ | Rate % | Band £ | Rate % |
| 0 – 37,700 | 20 | 0 – 37,500 | 20 |
| 37,701 – 150,000 | 40 | 37,501 – 150,000 | 40 |
| Over 150,000 | 45 | Over 150,000 | 45 |
National Insurance
2021/22 Class 1 (employed) rates
| Employee Earnings per week | % | Employer 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 |
Inheritance tax
| Death rate | Lifetime rate | Chargeable transfers 2021/22 and 2020/21 |
| Nil | Nil | 0 – £325,000 (nil rate band) |
| 40% | 20% | Over £325,000 |
Car, van and fuel benefits
| 2021/22 | Cars registered pre 6.4.20 | Cars registered after 5.4.20 |
| CO2 emissions g/km | % of list price taxed | % of list price taxed |
| 0 | 1 | 1 |
| 1-50 | ||
| Electric range | ||
| – 130 or more | 2 | 1 |
| – 70 – 129 | 5 | 4 |
| – 40 – 69 | 8 | 7 |
| – 30 – 39 | 12 | 11 |
| – under 30 | 14 | 13 |
| 51 – 54 | 15 | 14 |
| For every extra 5 | +1 | +1 |
| 160 and above | 37 | n/a |
| 165 and above | n/a | 37 |
For fully diesel cars generally add a 4% supplement (unless the car is registered on or after 1 September 2017 and meets the Euro 6d emissions standard) but the maximum is still 37%. For emissions of 75g/km or more if the CO2 figure does not end in a 5 or 0 round down to the nearest 5 or 0.
| 2021/22 | |
| Car fuel benefit | £24,600 |
| Van benefit | £3,500 |
| Van fuel benefit | £669 |
Capital allowances
| Corporation tax super-deduction on certain plant and machinery | 130% |
| First Year Allowance (FYA) on certain plant, machinery and cars of 0g/km | 100% |
| Corporation tax FYA on long-life assets, integral features of buildings, etc. | £3,500 |
| Annual Investment Allowance (AIA) £1,000,000 (£200,000 from 1 January 2022) | Excludes Cars |
| Writing Down Allowance | |
| – Long-life assets, integral features of buildings, cars over 50g/km | 6% |
| Other plant and machinery | 18% |
| Structures and Buildings Allowance | 3% |
Corporation Tax
| Rate % | Rate % | ||
| Year to 31.3.22 | 19 | Year to 31.3.21 | 19 |
Value added tax
| From 1.4.21 | From 1.4.20 | |
| Standard rate | 20% | 20% |
| Reduced rate | 5% | 5% |
| Annual Registration Limit | £85,000 | £85,000 |
| Annual Deregistration Limit | £83,000 | £83,000 |
*12.5% for hospitality and tourism from 1 October 2021 – 31 March 2022.
Capital gains tax
| Individuals | 2021/22 | 2020/21 |
| Exemption | £12,300 | £12,300 |
| Standard rate | 10% | 10% |
| Higher/additional rate | 20% | 20% |
| Trusts | ||
| Exemption | £6,150 | £6,150 |
| Rate | 20% | 20% |
Higher rates (18/28%) may apply to the disposal of certain residential property and carried interest.
Business Asset Disposal Relief
The first £1m of qualifying gains are charged at 10%.
Property Taxes
Across the whole of the UK, residential rates may be increased by 3% (4% in Scotland and Wales) where further residential properties are acquired.
Stamp Duty Land Tax
Land and buildings in England and N. Ireland
| Residential Band £ | Rate % | Non-residential Band £ | Rate % |
| 0 – 500,000* | 0 | 0 – 150,000 | 0 |
| *500,001 – 925,000 | 5 | 150,001 – 250,000 | 2 |
| 925,001 – 1,500,000 | 10 | Over 250,000 | 5 |
| Over 1,500,000 | 12 |
*£250,000 from 1 July 2021. From 1 October 2021, 0% up to £125,000, 2% from £125,001 – £250,000 and 5% from £250,001 – £925,000.
Land and Buildings Transaction Tax
Land and buildings in Scotland
| Residential Band £ | Rate % | Non-residential Band £ | Rate % |
| 0 – 145,000 | 0 | 0 – 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 Buyer relief may apply on the first £175,000 of residential purchases.
Land Transaction Tax
Land and buildings in Wales
| Residential Band £ | Rate % | Non-residential Band £ | Rate % |
| 0 – 180,000* | 0 | 0 – 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 |
*The rates are 0% up to £250,000 and 5% between £250,001 – £400,000 until 30 June 2021.
This summary is published for the information of clients. It provides only an overview of the main proposals announced by the Chancellor of the Exchequer in his Budget Statement, and no action should be taken without consulting the detailed legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this summary can be accepted by the authors or the firm.
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