Tax Rates for 2021/2022

TAX RATES, ALLOWANCES AND RELIEFS FOR 2021/2022

 £ (GBP)
Income limit for personal allowance£100,000
Personal allowance£12,570
Married couple’s allowance maximum amount (for those born before 6 April 1935)£9,125
Married couple’s allowance minimum amount (for those born before 6 April 1935)£3,530
Transferable Tax Allowance for married couples and civil partners£1,260
Blind person’s allowance£2,520

Income Tax Rates

Rate on taxable incomeBand, £(GBP)Rate,%
Starting savings rate 0 – £5,0000*
Basic rate £0 – £37,70020**
Higher rate£37,701 – £150,00040***
Additional rate over £150,00045****
* Starting savings rate is available for savings income only. The rate 0% is not available if taxable non-savings income exceeds £5,000.Dividend Allowance of £2,000 is tax free. 
** except dividends (7.5%)
*** except dividends (32.5%)
**** except dividends (38.1%)

National Insurance Contributions

Weekly earnings £(GBP)Not contracted out
Class I (employment) Employee’s rate 
Up to £184Nil
£184 to £96712%
Over £9672%
Employment allowance, per employer, per year*£4,000
Employer’s rates   
Up to £170Nil
Above £17013.8%
Class 2Annual small earning exception is £6,515 per yearClass 2 rate per week is £3.05 
Class 4Lower annual earnings limit is £9,568 
Upper annual earnings limit is £50,270 
Class 4 rate below lower earnings limit0%
Class 4 rate between lower and upper earnings limit9%
Class 4 rate above upper earnings limit2%
* From 6 April 2020, the employment allowance will only apply to companies with an NIC bill of less than £100,000. No employers NIC for employees aged under 21 (and apprentices up to age 25) on earnings up to £967 per week (the upper earnings limit). 

 Capital Gains Tax

 Standard rate taxpayers10%
Higher rate taxpayers20%
Rates for trustees and personal representatives20%
Individual annual exemption £12,300
Trusts annual exemption £6,150
Business asset disposal relief (Entrepreneurs’ relief) lifetime limit£1,000,000
Entrepreneurs’ relief rate10%
Residential property18% / 28%

 Individual Savings Accounts (ISAs) After 1 July 2014

 Max annual contributions – Total overall annual investment limit a combination of amounts between a Cash and Stocks and Shares NISA, up to the overall annual limit of £20,000.£20,000

Stamp Duty (from 4 December 2014)

From 4 December 2014 the SDLT rates were changed by a new regime under which you will only pay the rate of tax on the part of the property price within each tax band.

 3% surcharge in addition to the existing stamp duty land tax rates on additional or rental properties above £40,000 from 1 April 2016.

2% surcharge in addition to the existing stamp duty land tax rates if purchase is of residential property by certain non-UK residents on or after 1st April 2021.

5% surcharge in addition to the existing stamp duty land tax rates if purchase is of an additional residential property and by certain non-UK residents on or after 1st April 2021.

Stamp Duty (Initial Temporary Relief Period – 1 April 2021 to 30 June 2021)

Residential  
£500,000 or lessNil
On the next £425,000*5%
On the next £575,000**10% / 15%
On the rest (above £1,500,000)12% / 15%

Stamp Duty (Further Temporary Relief Period – 1st July 2021 to 30th September 2021)

Residential  
£250,000 or lessNil
On the next £625,000*5%
On the next £575,00010% / 15%
On the rest (above £1,500,000)12% / 15%

Stamp Duty (Standard rates from 1st October 2021 onwards)

Residential  
£125,000 or lessNil
On the next £125,000*2%
On the next £675,000**5% / 15%
On the next £575,00010% / 15%
On the rest (above £1,500,000)12% / 15%
Non-residential or mixed use 
£150,000 or less – annual rent less than 1,000Nil
£150,001 – £250,000 2%
Over £250,0005%
Shares and Securities Standard rate – 0.5%, higher rate – 1.5%

Lease rentals (on grant): The net present value is charged at 1% on the excess over £125,000 for residential and 1% on the excess over £150,000 for non-residential or mixed use, land.

1.* The threshold for properties in disadvantaged areas is £150,000

2.** The 15% rate applies to properties over £500,000 purchased on or after 20 March 2014 by ‘non-natural persons’, such as a company

3. Special rules apply to stamp duty land tax on premiums where the annual rent exceeds £1,000

4. 2% surcharge on stamp duty and tax rates on commercial property with a net present value over £5 million

Capital Allowances

Annual investment allowance on new purchase of plant and machinery£200,000
First year allowance (FYA) for business expenditure on new low rate (0g/km) emission vehicles100%
Writing-down allowances%
Integral features, long Life plant and machinery and certain cars6
Structures and buildings3
Other plant and machinery (main writing down allowance rate)18
Vehicles with emissions less than or equal to 50g/km18
Vehicles with emissions between 50g/km and 110g/km6
Vehicles with emissions over 110g/km6

 Annual Tax on Enveloped Dwellings

 Property value is from £500,000 to £1m£3,700
Property value is from £1 million to £2 million£7,500
Property value is from £2 million to £5 million£25,300
Property value is from £5 million to £10 million £59,100
Property value is from £10 million to £20 million£118,600
Property value is above £20 million£237,400
Disposal of ATED property gains are subject to capital gain tax28%

Corporation Tax

 Taxable profit £ (GBP)s
Taxable profits (FY 1/04/2021-01/04/2022)19%

 VAT

 Standard Rate20%
Reduced Rate5%
Zero Rate0%
Annual Turnover Limits for registration – last 12 months or if turnover is going to exceed within the next 30 days£ 85,000
Annual Turnover Limits for de-registration£ 83,000

Digital services tax

From 1 April 2020, a 2% tax on the UK related revenues of certain digital businesses with global in scope revenues exceeding £500m per annum applies to activities comprising search engines, social media platforms and online market places. The first £25m of in scope UK related revenues per annum is not subject to this charge.

Inheritance tax

 IHT nil rate£325,000*
Residence nil rate band (RNRB)£175,000**
Over £325,00040%
Lower rate, when 10% or more of estate is left to a charity36%
Annual Exemption 
Annual gifts per donor per year£3,000
Small gifts per donee per year£250
Wedding gifts to each of your children£5,000
Wedding gifts to each grandchild£2,500
Wedding gifts to others£1,000

*If someone’s estate is less than the Inheritance Tax threshold of £325,000, the remaining threshold can be transferred to their husband, wife or civil partner’s estate when they die.

** The RNRB is tapered by 1 for every £2 that the estate exceeds £2m.

 Non-Domiciled Remittance Basis Charges (RBC)

Unremitted income less than 2,0000%
Resident in the UK at least 7 of previous 9 tax years£30,000
Resident in the UK at least 12 of previous 14 tax years£60,000
Resident in the UK at least 17 of the previous 20 tax years, if you’re reporting income you earned before 6 April 2017*£90,000*
Personal allowance0
Capital Gains Tax Annual Exemption0

*Cancelled from 5th April 2017, once non-domiciled individuals were resident in the UK for at least 15 of the 20 tax years, they will be deemed UK domiciled for all tax purposes.

 Pension Schemes Allowance

Annual Allowance£40,000
Lifetime Allowance£1,073,100

Tax efficient Savings and Investment

Venture Capital Trust up to£200,000
Seed Enterprise Investment Scheme up to£100,000
Enterprise Investment Scheme£1,000,000*
Social Investment Tax Relief£1,000,000

 *£2,000,000 for knowledge intensive companies  

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