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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) was introduced in April 2017. The MRNRB now allows 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 £9,500per 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 £967paid 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 £10,000,000
Entrepreneurs’ Relief rate 10% 10%
Investors’ relief lifetime limit £1,000,000 £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% £0-£37,700 £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 individual’s
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 taxpayer 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 23 & over £8.91 p.h. £8.72 p.h.

 

National Minimum Wage 2021-22 2020-21
Aged 23+ £8.91p.h. £8.72 p.h.
Aged 21 to 22 £8.36p.h. £8.20 p.h.
Aged 18 to 20 £6.56p.h. £6.45 p.h.
Aged 16 and 17 £4.62p.h. £4.55 p.h.
Apprentice rate £4.30p.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%

 

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.

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