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2020/21 TAX RATES

INCOME TAX
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
2020/21 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
INDIVIDUAL SAVINGS ACCOUNTS
 
2020/21
2019/20
Overall investment limit
£20,000
£20,000
Junior account investment limit
£9,000
£4,368
CAR, VAN AND FUEL BENEFITS
2020/21
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
+1
+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 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.

 
2020/21
Car fuel benefit
£24,500
Van benefit
£3,490
Van fuel benefit
£666
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
STAMP DUTY LAND TAX
Land and buildings in England and N. Ireland
Residential rates may be increased by 3% where further residential properties are acquired.
Residential
£
Rate
£
Non-residential
£
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.


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.
CORPORATION TAX
 
Rate %
 
Rate %
Year to 31.3.21
19
Year to 31.3.20
19

Different rates apply for ring-fenced (broadly oil industry) profit.


CAPITAL ALLOWANCES

First Year Allowance (FYA) on certain energy-efficient

100%
plant, machinery and cars up to 50g/km

Annual Investment Allowance (AIA) from 1 January 2021

£1,000,000 (£200,000)

Excludes cars and expenditure already qualifying 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
From April 2020
3%
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
VALUE ADDED TAX
 
From 1.4.20
From 1.4.19
Standard rate
20%
20%
Reduced rate
5%
5%
Annual Registration Limit
£85,000
£85,000
Annual Deregistration Limit
£83,000
£83,000

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 firm.


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 1 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 aged 25 and over.


TAX RELIEFS FOR INDIVIDUALS

2020/2021 and 2019/20

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.