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 Earnings per week % Employer 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 – 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

Residential rates apply from 8 July 2020 to 31 March 2021.

Capital Gains Tax

2020/21 2019/20
Individuals
Exemption £12,300 £12,000
Standard rate 10% 10%
Higher/additional rate 20% 20%
Trusts
Exemption £6,150 £6,000
Rate 20% 20%
Higher/additional 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 31.3.21 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 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 £1,055,100
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 £129.20
Shared Parental Pay £151.20 £129.20
Paternity Pay £151.20 £129.20

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.

Key Dates and Deadlines

Payment Dates 2020/21 2019/20
Income Tax and Class 4 NIC
– 1st payment on account 31 January 2021 2020
– 2nd payment on account 31 July 2021 2021
– Balancing payment 31 January 2022 2020
Class 2 NIC 31 January 2022 2021
Capital Gains Tax 31 January 2022 2021
Class 1A NIC 19 July 2021 2020

Corporation Tax – 9 months and one day after the end of accounting period (quarterly instalments if large company)

2019/20 Returns Filing Deadlines:

  • 31 May 2020 – P60s to employees
  • 6 July 2020 – P11D and P11D(b) and copies to employees 31 October 2020 – paper Self Assessment Tax Return (SATR)
  • 30 December 2020 – SATR Online where outstanding tax (subject to cap) to be included in 2021/22 PAYE code
  • 31 January 2021 – SATR Online

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