Income Tax Rates

Rates and bands (other than savings and dividend income)

2020/21   2019/20
Band (£) Rate (%)   Band (£) Rate (%)
0 - 37,500 20   0 - 37,500 20
37,501 - 150,000 40   37,501 - 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 2020/21 and 2019/20
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 2021/20 and 2019/20
Dividend allowance £2,000
Dividend ordinary rate 7.5%
Dividend upper rate 32.5%
Dividend additional rate 38.1%

Income Tax Reliefs

  2020/21 2019/20
Personal allowance £12,500 £12,500
Personal allowance income limit £100,000 £100,000
Marriage allowance £1,250 £1,250
Married couple's allowance £9,075 £8,915
- minimum amount £3,510 £3,450
- income limit £30,200 £29,600
Blind person's allowance £2,500 £2,450

Pensions

  2020/21 2019/20
Lifetime Allowance limit £1,073,100 £1,055,000
Annual Allowance limit £40,000 £40,000
Money Purchase Annual Allowance £4,000 £4,000

Car, Van and Fuel Benefits

Company cars 2020/2021
2020/2021 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 0 0
1-50    
Electric range - 130 or more 2 0
                       70 - 129 5 3
                       40 - 69 8 6
                       30 - 39 12 10
                       under 30 14 12
51-54 15 13
for every extra 5 additional 1% additional 1%
160 and above 37 n/a
170 and above n/a 37

For fully diesel cars generally add a 4% supplement (unless the car is registered on or after 1st September 2017 and meets the Euro 6d emissions standard) but the maximum is still 37%.

For emissions over 75g/km if the CO2 figure does not end in a 5 or 0 round down to the nearest 5 or 0. 

  2020/21
Car fuel benefit £24,500
Van benefit £3,490
Van fuel benefit £666

Individual Savings Accounts

  2020/21 2019/20
Overall investment limit
£20,000
£20,000
Junior account investment limit
£9,000
£4,368

Corporation Tax

  Rate %   Rate %
Year to 31.03.21 19 Year to 31.03.20 19
 
Different rates apply for ring-fenced (broadly oil industry) profit.

Capital Allowances

First Year Allowance (FYA) on certain plant, machinery and cars up to 50g/km - 100%

Annual Investment Allowance (AIA) - £1,000,000 (£200,000 from 1 January 2021).
Excludes cars and expenditure already qualifiying for FYA

Writing Down Allowance
Expenditure not qualifying for AIA or FYA:
Long-life assets, integral features of buildings, cars over 110g/km - 6%
Other plant and machinery - 18%

Structures and Buildings Allowance - 3%
From April 2020

Value Added Tax

  From 01.04.20
From 01.04.19
Standard rate
20%
20%
Reduced rate
5%
5%
Annual Registration Limit
£85,000
£85,000
Annual Deregistration Limit
£83,000
£83,000

Capital Gains Tax

Individuals  2020/21 2019/20
Exemption £12,300
£12,000
Standard rate
10%
10%
Higher / additional rate
20%
20%
Trusts
Exemption £6,150 £6,000
Rate
20%
20%

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

Entrepreneurs' Relief
The first £10m of qualifying gains are charged at 10%. This is reduced to £1m for disposals on or after 11 March 2020 subject to certain transitional rules. 

Inheritance Tax

Death rate Lifetime rate Chargeable transfers 2020/21 and 2019/20
Nil
Nil
0 - £325,000 (nil rate band)
40%
20%
Over £325,000

A further nil rate band of £175,000 (£150,000 for 2019/20) may be available in relation to current or former residences. 

Property Taxes

Across the whole of the UK, residential rates may be increased by 3% (4% in Scotland) 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 - 125,000 0 0 - 150,000 0
125,001 - 250,000 2 150,001 - 250,000 2
250,001 - 925,000 5 Over 250,000 5
925,001 - 1,500,000 10    
Over 1,500,000 12    

 First-time Buyer relief may apply to residential purchases up to £500,000. 

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 to 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 -150,000 0
180,001 - 250,000 3.5 150,001 - 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    

National Insurance

2020/21 Class 1 (employed) rates
Employee
Employer
Earnings per week % Earnings per week %
Up to £183 Nil Up to £169 Nil
£183.01 - £962 12 Over £169 13.8
Over £962 2    

Entitlement to contribution-based benefits for employees retained for earnings between £120 and £183 per week.
The employer rate is 0% for employees under 21 and apprentices under 25 on earnings up to £962 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 £6,475 per annum
Class 3 (voluntary) flat rate per week £15.30
Class 4 (self-employed) 9% on profits between £9,500 and £50,000 plus 2% on profits over £50,000

Selected Rates

  2020/21 2019/20
Weekly benefit £ £
Basic State Pension 134.25 129.20
New State Pension
175.20
168.60

Statutory pay standard rates - average weekly earnings £120 (£118) or over

   
Sick Pay 95.85 94.25
Maternity / Adoption Pay 151.20 148.68
Shared Parental Pay 151.20 148.68
Paternity Pay 151.20 148.68

National Living Wage and National Minimum Wage

Age NLW 21-24 18-20 16-17 Apprentices
From 1st April 2020 £8.72 £8.20 £6.45 £4.55 £4.15

Applies to apprentices under 19, or 19 and over in the first year of apprenticeship.
NLW applies to those age 25 and over. 

Tax Relief 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 amonts 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 details conditions being met. 


Disclaimer: Rates are for guidance only. No responsibility for loss occasioned by any person acting / refraining from action as a result of this information can be accepted by the authors or Armstrongs. 

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