Inheritance Tax
National Insurance
Capital Gains Tax
Tax Credits
Pensions
Income Tax
Stamp Duty & Stamp Duty Land Tax
Minimum Wage
VAT
Corporation Tax
Car, Van & Fuel Benefits
Mileage Allowance Payments
Capital Allowances
Tax Favoured Investments
Inheritance Tax
Inheritance Tax
| Inheritance Tax | 2021-22 | 2020-21 | |||
| Nil rate band for individuals* | £325,000 | £325,000 | |||
| Thereafter – lifetime gifts** | 20% | 20% | |||
| – lower rate on death*** | 36% | 36% | |||
| – on death | 40% | 40% | |||
| Residence nil rate band**** | £175,000 | £175,000 | |||
| * Unused nil rate band can be used by surviving spouse or civil partner. This band is currently frozen until April 2026. ** Increased to 40%, subject to tapering relief, on gifts made between 3 and 7 years pre death. Certain lifetime gifts are exempt. Special rules for business property. *** A lower rate applies where 10% or more of the net estate is left to charity. | |||||
| **** A new inheritance tax main residence nil-rate band (MRNRB) will be introduced from April 2017. The MRNRB will eventually allow for a £175,000 per person transferable allowance for married couples and civil partners when their main residence is passed down to children after their death. The MRNRB is in addition to the existing £325,000 inheritance tax threshold. | |||||
| Years before death | 0-3 | 3-4 | 4-5 | 5-6 | 6-7 |
| % of death charge | 100% | 80% | 60% | 40% | 20% |
| Main exempt lifetime gifts | |||||
| Recurring annual gifts out of surplus income | unlimited | ||||
| Annual gifts out of capital (with one year carry forward if unused) | £3,000 | ||||
| Small gifts (per recipient) | £250 | ||||
| Parental gift on marriage | £5,000 | ||||
| Grandparent or party to marriage | £2,500 | ||||
| Other gifts on marriage (per donor) | £1,000 | ||||
| Business Property Relief | |||||
| Shares in unquoted companies (including USM/AIM stocks) | 100% | ||||
| Shares in quoted companies | |||||
| – shareholding up to 50% | none | ||||
| – shareholding over 50% | 50% | ||||
| Unincorporated business or interest in a business | 100% | ||||
| Land, buildings, plant and machinery used in the deceased’s business/company | 50% | ||||
National Insurance
National Insurance
| National Insurance – Rates and Allowances | 2021-22 | 2020-21 |
| Lower weekly earnings limit, primary Class 1 | £120 | £120 |
| Upper weekly earnings limit, primary Class 1 | £967 | £962 |
| Primary weekly earnings threshold | £184 | £183 |
| Secondary weekly earnings threshold | £170 | £169 |
| Employees’ primary Class 1 rate between primary earnings threshold and upper earnings limit | 12% | 12% |
| Employees’ primary Class 1 rate above upper earnings limit | 2% | 2% |
| Married women’s reduced rate between primary earnings threshold and upper earnings limit | 5.85% | 5.85% |
| Married women’s rate above upper earnings limit | 2% | 2% |
| Employers’ secondary Class 1 rate above secondary earnings threshold | 13.80% | 13.80% |
| Class 2 weekly rate | £3.05 | £3.05 |
| Class 2 small earnings exception | £6,515 per year | £6,475 per year |
| Special Class 2 weekly rate for share fishermen | £3.70 | £3.70 |
| Special Class 2 weekly rate for volunteer development workers | £6.00 | £6.00 |
| Class 3 voluntary weekly rate | £15.40 | £15.30 |
| Class 4 lower profits limit | £9,568 per year | £9,500 per year |
| Class 4 upper profits limit | £50,270 per year | £50,000 per year |
| Class 4 rate between lower profits limit and upper profits limit | 9% | 9% |
| Class 4 rate above upper profits limit | 2% | 2% |
A NI tax free allowance of £4,000 for 2021/22 (2020/21 – £4,000) is available to offset against employers’ Class 1 secondary NICs subject to certain restrictions.
No employers’ contributions are payable in respect of weekly earnings up to £967 paid to employees under 21 nor for qualifying apprentices aged under 25.
Capital Gains Tax
Capital Gains Tax
| Capital Gains Tax: Individuals and Trustees | 2021-22 | 2020-21 |
| Annual exempt amount | ||
| Individuals | £12,300 | £12,300 |
| Trusts | £6,150 | £6,150 |
| Rates | ||
| Standard rate taxpayers | 10% | 10% |
| Higher rate taxpayers / Trustees | 20% | 20% |
| Limit for gains subject to entrepreneurs’ Relief | £1,000,000 | £1,000,000 |
| Entrepreneurs’ Relief rate | 10% | 10% |
| Investors’ relief lifetime limit | £10,000,000 | £10,000,000 |
| Investors’ relief rate | 10% | 10% |
| * There is an 8% surcharge on the sale of chargeable residential property and carried interest (the share of profits or gains that is paid to asset managers). | ||
Tax Credits
| Tax Credits | 2021-22 | 2020-21 |
| Basic element – maximum | £2,005 | £1,995 |
| Childcare element 70% of eligible costs up to £175 per week for one child, £300 for two or more children. | ||
| Child Tax Credits | 2021-22 | 2020-21 |
| Child element per child – maximum | £2,845 | £2,830 |
| Family element | £545 | £545 |
| If only the child tax credit is claimed, the threshold is £16,480 pa. | ||
Pensions
| Pension Contributions | 2021-22 | 2020-21 |
| Lifetime allowance | £1,073,100 | £1,073,100 |
| Maximum annual contribution | £40,000 | £40,000 |
| Tax on excess | Marginal rate | Marginal rate |
| Normal minimum pension age | 55 | 55 |
| Old State pension – per week** | 2021-22 | 2020-21 |
| Single person | £137.60 | £134.25 |
| Addition for wife if non-contributor | £82.45 | £80.50 |
| New State Pension – per week | 2021-22 | 2020-21 |
| Single person | £179.60 | £175.20 |
*The annual allowance is tapered for taxpayers whose income exceeds £150,000.
The allowance is reduced by £1 for every £2 that an individual’s income exceeds
£150,000, down to a minimum of £4,000 for individuals with income of £240,000 or more.
**Retirees that reached the State Pension age before 6 April 2016,
will continue to receive the old state pension and not the new state pension.
Income Tax
| Bands | 2021-22 | 2020-21 |
| Savings starting rate – 0%* | £0 – £5,000 | £0 – £5,000 |
| Basic rate 20% | £1 – £37,500 | £1 – £37,500 |
| Higher rate 40% | £37,701 – £150,000 | £37,501 – £150,000 |
| Additional rate 45% | Over £150,000 | Over £150,000 |
| Scottish rates | 2021-22 | 2020-21 |
| Starter rate 19% on taxable income | £12,571 – £14,667 (£2,097) | £12,500 – £14,585 (£2,085) |
| Basic rate 20% | £14,668 – £25,296 (£10,629) | £14,586 – £25,158(£12,658) |
| Intermediate rate – 21% | £25,297– £43,662 (£18,366) | £25,159– £43,430 (£18,272) |
| Higher rate – 41% | £43,663 – £150,000 | £43,431 – £150,000 |
| Additional rate – 46% | Over £150,000 | Over £150,000 |
* Savings income is taxed at 0% up to £5,000 (0% up to £5,000). If an individuals
taxable non-savings income exceeds £5,000 then the savings rate will not be available.
** The Scottish Rate of Income Tax (SRIT) is payable on the non-savings and non-dividend
income of those defined as Scottish taxpayers.
| Dividend allowance | £2,000 | £2,000 |
| Dividend ordinary rate | 7.5% | 7.5% |
| Dividend upper rate | 32.5% | 32.5% |
| Dividend additional rate | 38.1% | 38.1% |
| Personal savings allowance | 2021-22 | 2020-21 |
| – basic rate taxpayers | £1,000 | £1,000 |
| – higher rate taxpayers | £500 | £500 |
| Reliefs | 2021-22 | 2020-21 |
| Personal allowance | £12,570 | £12,500 |
| Registered blind person’s allowance | £2,520 | £2,500 |
| Income limit for personal allowance* | £100,000 | £100,000 |
* The personal allowance is gradually withdrawn by £1 for every £2 of income over £100,000.
| Married couple allowance – tax relief given at 10% | 2021-22 | 2020-21 |
| – Born before 6 April 1935 | £9,125 | £9,075 |
| – Minimum amount* | £3,530 | £3,510 |
| – Income limit | £30,400 | £30,200 |
| – Marriage allowance* | £1,260 | £1,250 |
* A tax payer can transfer up to £1260 – 2021/22 (£1,250 – 2020/21) of their unused personal allowance to a spouse or civil partner who is not a higher rate tax payer.
| High Income Child Benefit Charge* on income over | £50,000 | £50,000 |
* The tax charge is levied at the rate of 1% of the full child benefit award for each £100 that income exceeds £50,000, up to a maximum of 100% of the child benefit claimed.
Taxpayers can choose whether to continue receiving child benefit and pay the tax charge or may opt out of receiving the child benefit.
There is a cap on certain Income Tax reliefs of the greater of £50,000 or 25% of income.
Stamp Duty & Stamp Duty Land Tax
Stamp Duty & Stamp Duty Land Tax
Stamp Duty and Annual Tax on Enveloped Dwellings
Shares and securities rate 0.5%
The annual tax on Enveloped Dwellings (ATED) is payable by certain non-natural persons that own interests in dwellings valued at more than £500,000.
Stamp Duty and Stamp Duty Land Tax (SDLT)
Property in England, Wales and N. Ireland
Initial Temporary Relief Period – 1 April 2021 to 30 June 2021
| Rate | Residential Property |
| Zero | £0 – £500,000 |
| 5% | £500,001 – £925,000 |
| 10% | £925,001 – £1,500,000 |
| 12% | Over £1,500,000 |
Property in England, Wales and N. Ireland
Further Temporary Relief Period – 1st July 2021 to 30th September 2021
| Rate | Residential Property |
| Zero | £0 – £250,000 |
| 5% | £250,001 – £925,000 |
| 10% | £925,001 – £1,500,000 |
| 12% | Over £1,500,000 |
Standard rates from 1st October 2021
| Rate | Residential Property |
| Zero | £0 – £125,000 |
| 2% | £125,001 – £250,000 |
| 5% | £250,001 – £925,000 |
| 10% | £925,001 – £1,500,000 |
| 12% | Over £1,500,000 |
SDLT on non-residential and mixed used properties.
| Rate | Non-Residential Property |
| Zero | £0 – £150,000 |
| 2% | £150,001 – £250,000 |
| 5% | Over £250,000 |
These rates are applied on a graduated basis with the portion of the purchase price within each tier charged at the applicable rate.
15% is applied to residential properties held in a ‘corporate envelope’ costing over £500,000.
There is a higher rate of SDLT that applies to purchases of additional residential property such as buy to let and second homes.
The rate is 3% higher than the current SDLT rates and applies to the purchase of additional residential properties valued at £40,000 and above.
Scotland: Land & buildings transaction tax (SLBTT)
Property in Scotland
| Rate | Residential Property |
| Zero | £0 – £145,000 |
| 2% | £145,001 – £250,000 |
| 5% | £250,001 – £325,000 |
| 10% | £325,001 – £750,000 |
| 12% | Over £750,000 |
Non-Residential and mixed use properties.
| Rate | Non-Residential Property |
| Zero | £0 – £150,000 |
| 2% | £150,001 – £250,000 |
| 5% | Over £250,000 |
These rates are applied on a graduated basis with the portion of the purchase price within each tier charged at the applicable rate.
There are currently no further measures specifically targeting first-time buyers in Wales.
There is a WLTT higher rate supplement of 3% on purchases of additional residential properties costing £40,000 or more.
Minimum Wage
| National Living Wage | 2021-22 | 2020-21 |
| Age 25 & over | £8.91 p.h. | £8.72 p.h. |
| National Minimum Wage | 2021-22 | 2020-21 |
| Aged 25+ | £8.91 p.h. | £8.72 p.h. |
| Aged 21 to 24 | £8.36 p.h. | £8.20 p.h. |
| Aged 18 to 20 | £6.56 p.h. | £6.45 p.h. |
| Aged 16 and 17 | £4.62 p.h. | £4.55 p.h. |
| Apprentice rate | £4.30 p.h. | £4.15 p.h. |
VAT
| Rates and Limits | 2021-22 | 2020-21 |
| Standard rate | 20% | 20% |
| Reduced rate | 5% | 5% |
| Zero rate | 0% | 0% |
| Temporary reduced rate for hospitality and tourism sector* | 5%/12.5% | 5% (with effect from 15 July 2020) |
| Annual registration limit (from 1 April 2017) | £85,000 | £85,000 |
| Annual deregistration limit (from 1 April 2017) | £83,000 | £83,000 |
| VAT Cash accounting scheme threshold | £1,350,000 | £1,350,000 |
| VAT Annual accounting scheme threshold | £1,350,000 | £1,350,000 |
*The 5% rate applies to the 30 September 2021 and the 12.5% rate applies from 1 October 2021 to 31 March 2022
Corporation Tax
| Rates and Limits | FY 2021-22 | FY 2020-21 |
| Main rate | 19% | 19% |
There is an 8% supplementary tax on banking profits.
Car, Van & Fuel Benefits
Car, Van and Fuel Benefits
| Company Car Tax BIK Rates – Cars registered from 6th April 2020 | |||
% of P11D price | 2020/21 CO2 g/km/ (electric mileage range) | 2021/22 CO2 g/km/ (electric mileage range) | 2022/23 CO2 g/km/ (electric mileage range) |
| 0 | 0-50 (more than 130 miles) | N/A | N/A |
| 1 | N/A | 0-50 (more than 130 miles) | N/A |
| 2 | N/A | N/A | 0-50 (more than 130 miles) |
| 3 | 1-50 (70-129 miles) | N/A | N/A |
| 4 | N/A | 1-50 (70-129 miles) | N/A |
| 5 | N/A | N/A | 1-50 (70-129 miles) |
| 6 | 1-50 (40-69 miles) | N/A | N/A |
| 7 | N/A | 1-50 (40-69 miles) | N/A |
| 8 | N/A | N/A | 1-50 (40-69 miles) |
| 10 | 1-50 (30-39 miles) | N/A | N/A |
| 11 | N/A | 1-50 (30-39 miles) | N/A |
| 12 | 1-50 (under 30 miles) | N/A | 1-50 (30-39 miles) |
| 13 | 51-54 | 1-50 (under 30 miles) | N/A |
| 14 | 55-59 | 51-54 | 1-50 (under 30 miles) |
| 15 | 60-64 | 55-59 | 51-54 |
| 16 | 65-69 | 60-64 | 55-59 |
| 17 | 70-74 | 65-69 | 60-64 |
| 18 | 75-79 | 70-74 | 65-69 |
| 19 | 80-84 | 75-79 | 70-74 |
| 20 | 85-89 | 80-84 | 75-79 |
| 21 | 90-94 | 85-89 | 80-84 |
| 22 | 95-99 | 90-94 | 85-89 |
| 23 | 100-104 | 95-99 | 90-94 |
| 24 | 105-109 | 100-104 | 95-99 |
| 25 | 110-114 | 105-109 | 100-104 |
| 26 | 115-119 | 110-114 | 105-109 |
| 27 | 120-124 | 115-119 | 110-114 |
| 28 | 125-129 | 120-124 | 115-119 |
| 29 | 130-134 | 125-129 | 120-124 |
| 30 | 135-139 | 130-134 | 125-129 |
| 31 | 140-144 | 135-139 | 130-134 |
| 32 | 145-149 | 140-144 | 135-139 |
| 33 | 150-154 | 145-149 | 140-144 |
| 34 | 155-159 | 150-154 | 145-149 |
| 35 | 160-164 | 155-159 | 150-154 |
| 36 | 165-169 | 160-164 | 155-159 |
| 37 | 170+ | 165+ | 160+ |
For each tax year add 4% for diesel cars up to a maximum of 37%. Cars that meet the Real Driving Emissions Step 2 (RDE2) standard are exempt.
Mileage Allowance Payments
| Cars & vans | Rate per mile 2021-22 |
| – up to 10,000 miles | 45p |
| – over 10,000 miles | 25p |
| Motorcycles | 24p |
| Bicycles | 20p |
| These rates represent the maximum tax free mileage allowances for employees using their own vehicles for business. Any excess is taxable. If the employee receives less than the statutory rate, tax relief can be claimed on the difference. | |
Capital Allowances
Capital Allowances
| Plant and Machinery | 2021-22 | 2020-21 |
| – Main writing down allowance – Long life assets, integral fixtures – First year allowances (certain environmentally efficient products) | 18% 6% N/A | 18% 6% N/A |
| – R&D tax credits SME scheme – R&D expenditure credit | 230% 13% | 230% 13% |
| The Annual investment Allowance of £1,000,000 continues to 31 December 2021, after which it reverts to £200,000. For companies only, for the period 1 April 2021-31 March 2023, a super -deduction of 130% of expenditure on main-rate assets and 50% on special rate relief assets applies | ||
| Cars | 2021-22 | 2020-21 |
| -CO2 emissions | ||
| 0 g/km or below 1 – 50 g/km Above 50 | 100% FYA 18% WDA – Main pool 6% WDA – Special pool | |
| 50 g/km or below 51-110 g/km Above 110 g/km | 100% FYA 18% WDA – Main pool 6% WDA – Special pool | |
Tax Favoured Investments
Tax Favoured Investments
| 2021-22 | 2020-21 | |
| ISA limited | £20,000 | £20,000 |
| Lifetime ISA | £4,000 | £4,000 |
| Junior ISA | £9,000 | £9,000 |
| Venture Capital Trusts Income Tax relief of up to 30% on investments up to £200,000. | ||
| Enterprise Investment Scheme Income Tax relief of up to 30% on investments up to £1 million £2 million if at least £1 million of that is invested in knowledge-intensive companies | ||
| Seed Enterprise Investment Scheme Income Tax relief of 50% on maximum investment of £100,000. | ||
| Social Investment Tax Relief Income Tax relief at 30% of the amount invested plus Capital Gains Tax relief. | ||
