Tax Information

INCOME TAX ALLOWANCES
2021/22 2020/21
Personal allowance* £12,570 £12,500
Personal savings allowance
• Basic-rate taxpayer
• Higher-rate taxpayer
• Additional-rate taxpayer
£1,000
£500
£0
£1,000
£500
£0
Dividend allowance at 0% £2,000 £2,000
Marriage/civil partner transferable allowance** £1,260 £1,250
Trading and property allowance*** £1,000 £1,000
Rent-a-room allowance £7,500 £7,500
Blind person’s allowance £2,520 £2,500
* The personal allowance is reduced by £1 for each £2 of income from £100,000 to £125,140.
** Any unused personal allowance may be transferred to a spouse or civil partner, where the recipient is not liable to higher or additional-rate tax.
*** Landlords and traders with gross income from each of these sources in excess of £1,000 can deduct the allowance from their gross income as an alternative to claiming expenses.

INCOME TAX BANDS AND RATES
2021/22 2020/21
Starting rate of 0% on savings up to*: £5,000 £5,000
Basic-rate band £37,700 £37,500
Higher-rate band £37,701 to £150,000 £37,501 to £150,000
Additional-rate band Above £150,000 Above £150,000
Basic-rate 20% 20%
Higher-rate 40% 40%
Additional-rate 45% 45%
Dividend basic-rate 7.5% 7.5%
Dividend higher-rate 32.5% 32.5%
Dividend additional-rate 38.1% 38.1%
* The starting rate does not apply if taxable income exceeds the starting rate limit.

Income tax in Scotland
2021/22 2020/21
Band Taxable income Rate Taxable income Rate
Starter* £12,571 – £14,667 19% £12,501 – £14,585 19%
Basic £14,668 – £25,296 20% £14,586 – £25,158 20%
Intermediate £25,297 – £43,662 21% £25,159 – £43,430 21%
Higher** £43,663 – £150,000 41% £43,431 – £150,000 41%
Top** Above £150,000 46% Above £150,000 46%
* Assumes individual is in receipt of a personal allowance.
** The personal allowance is reduced by £1 for each £2 of income from £100,000 to £125,140.

VEHICLE AND FUEL BENEFITS-IN-KIND
The taxable benefit-in-kind is calculated as a percentage of the car’s UK list price. The percentage depends on the car’s CO2 emissions in grams per kilometre (g/km).
CO² emissions (g/km) Electric range (miles) Cars reg’d before 6.4.20* Cars reg’d on or after 6.4.20*
0 n/a 1% 1%
1 – 50 130 and over 2% 1%
1 – 50 70 – 129 5% 4%
1 – 50 40 – 69 8% 7%
1 – 50 30 – 39 12% 11%
1 – 50 Under 30 14% 13%
51 – 54 n/a 15% 14%
Over 54 n/a + 1% for every 5g/km up to 37% + 1% for every 5g/km up to 37%
*Diesel vehicles not meeting the RDE2 standard will be liable to a 4% surcharge, up to a maximum of 37%.
The list price is on the day before first registration, including most accessories, and is reduced by any employee’s capital contribution (max £5,000) when the car is first made available. Where the cost of all fuel for private use is borne by the employee, the fuel benefit is nil. Otherwise, the fuel benefit is calculated by applying the car benefit percentage to the car fuel benefit multiplier (below).
Company car fuel 2021/22 2020/21
Car fuel benefit multiplier £24,600 £24,500

Company vans* 2021/22 2020/21
Van benefit charge £3,500 £3,490
Van fuel benefit charge £669 £666
*Applies where private use is more than home-to-work travel. Payments by employees for private use may reduce these benefits-in-kind. Zero-emission vans have a benefit value of £0 (£2,792 in 2020/21).
TAX-FREE MILEAGE ALLOWANCES
Cars and vans (including electric vehicles) First 10,000 business miles 45p
Thereafter 25p
Motorcycles 24p
Bicycles 20p
Business passenger 5p
The tax-free business mileage allowance rates apply for qualifying business journeys incurred by employees using their own vehicles over the course of the tax year.
For National Insurance purposes, a 45p rate might apply for all business miles incurred by cars and vans.
CAPITAL GAINS TAX
2021/22 2020/21
Main rates Individual basic-rate 10% 10%
Individual above basic-rate 20% 20%
Trusts and estates 20% 20%
Surcharge – for gains on chargeable residential property and carried interest 8% 8%
Annual exemption Individuals £12,300 £12,300
Trusts £6,150 £6,150
Business asset disposal relief Applicable rate 10% 10%
Lifetime limit £1m £1m
Investors’ relief Applicable rate 10% 10%
Lifetime limit £10m £10m

INHERITANCE TAX
2021/22 2020/21
Nil-rate band threshold* £325,000 £325,000
Main residence nil-rate band** £175,000 £175,000
Combined threshold limit for married couples and civil partners, including main residence nil-rate band £1m £1m
Business property relief & agricultural property relief 50% or 100% 50% or 100%
* Up to 100% of any unused part of a deceased person’s nil-rate band can be claimed by the surviving spouse/civil partner on their death. This also applies to the main residence nil-rate band, albeit the main residence nil-rate is subject to the taper withdrawal below.
** For estates in excess of £2m, a 50% taper withdrawal applies to the excess.
Tax rates
2021/22 2020/21
Main rate 40% 40%
Chargeable on lifetime transfers 20% 20%
Transfers on or within seven years of death* 40% 40%
Reduced rate** 36% 36%
* All lifetime transfers not covered by exemptions and made within seven years of death will be added back into the estate for the purposes of calculating the tax payable. This may then be reduced as shown in the table below.
** Applies if 10% or more of net chargeable estate is left to certain registered charities.

Years before death 0 – 3 3 – 4 4 – 5 5 – 6 6 – 7
Tax reduced by 0% 20% 40% 60% 80%

UK COMPANY TAXATION
Financial year from 1 April 2021 2020
Corporation tax main rate 19% 19%
Loans to participators 32.5% 32.5%
Diverted profits tax 25% 25%

MAIN CAPITAL ALLOWANCES
Initial allowances
Annual investment allowance:
on first £1m (excludes cars)* 100%
Super-deduction: qualifying plant and machinery 130%
First-year allowance: special-rate pool 50%
First-year allowance: including new and unused electric and zero-emission goods vehicles 100%
*Applies from 1 January 2019 to 31 December 2021, reverting to £200,000 from 1 January 2022. Transitional rules may apply for chargeable periods spanning these dates.

Writing-down allowances
Plant and machinery main-rate expenditure 18%
Plant and machinery special-rate expenditure 6%
Cars 1 – 50g/km 18%
More than 50g/km 6%
Structures and buildings allowance – straight-line relief 3%

VAT
From 1 April 2021 Rate VAT fraction
Standard rate 20% 1/6
Reduced rate 5% 1/21
Temporary reduced rate* 12.5% 1/9
*Applies in the hospitality and tourism sector from 1 October 2021 to 31 March 2022.

Taxable turnover limits
From 1 April 2021 2021 2020
Registration (last 12 months or next 30 days) over £85,000 £85,000
Deregistration (next 12 months) under £83,000 £83,000
Annual and cash accounting schemes turnover limit £1.35m £1.35m
Flat-rate scheme turnover limit £150,000 £150,000

RESEARCH AND DEVELOPMENT (R&D)
Revenue expenditure – SMEs 230%
Capital expenditure – all companies 100%
SME company R&D payable credit 14.5%
Large company R&D expenditure credit (RDEC) 13%

TAX-EFFICIENT INVESTMENTS
Annual investment limit 2021/22 2020/21
ISA £20,000 £20,000
Lifetime ISA* £4,000 £4,000
Help-to-buy ISA (existing savers only) Up to £200 per month
Junior ISA and child trust fund £9,000 £9,000
Venture capital trust at 30% £200,000 £200,000
Enterprise investment scheme at 30%** £1m £1m
Seed EIS (SEIS) at 50% £100,000 £100,000
Social investment tax relief at 30% £1m £1m
* Reduces ISA limit by amount invested in Lifetime ISA.
** Up to £2m in a knowledge-intensive company.
REGISTERED PENSIONS
2021/22 2020/21
Lifetime allowance limit £1,073,100 £1,073,100
Money purchase annual allowance £4,000 £4,000
Annual allowance limit* £40,000 £40,000
Minimum age for accessing benefits 55 55
Maximum tax-free pension lump sum 25% of pension fund value
* Tapered at a rate of 50% of excess income down to £4,000 if threshold income over £200,000 and adjusted income over £240,000. Restrictions can apply based on net-relevant earnings.

Subject to certain conditions, the unused amount of the annual allowance can be carried forward up to three years and used once the current year annual allowance has been fully utilised.
NATIONAL INSURANCE
Class 1
Weekly earnings Employee rate Weekly earnings Employer rate
Up to £184 Nil* Up to £170 Nil
Over £184 – £967 12% Over £170 – £967 13.8%**
Over £967 2% Over £967 13.8%
Over state pension age 0% Over state pension age 13.8%
* Entitlement to contribution-based benefits are retained for earnings between £120 and £184 per week.
** 0% for staff under 21 and apprentices under 25 on earnings up to £967 a week.

Class 1A
On relevant benefits, including car and fuel benefits 13.8%

Class 2
Self-employed above small profits threshold £3.05 a week
Small profits threshold £6,515 per annum

Class 3
Voluntary £15.40 a week

Class 4*
Self-employed on profits £9,568 – £50,270 9%
Over £50,270 2%
* Exemption applies if the state retirement age is reached by 6 April 2021.

Employment allowance
Per employer, per year £4,000*
*One claim only for companies in a group or under common control. Not available where the director is the only employee paid earnings above the secondary threshold for class 1 NICs. Limited to employers with an employer NICs bill below £100,000 in the previous tax year.
Apprenticeship levy
A levy of 0.5% applies where the pay bill exceeds £3m. There is an allowance of £15,000. Further conditions apply, so please consult with us.
STAMP DUTY
Consideration on shares over £1,000 0.5%

PROPERTY TAXES
The incremental rate of tax is only payable on the part of the property price within each band. An additional 3% rate (4% in Scotland) applies to the purchase of an additional residential property above £40,000 and all corporate residential properties.
England & Northern Ireland: Stamp duty land tax (from 1.10.21)
On transfer of residential property* On transfer of non-residential property
£0 – £125,000** 0% £0 – £150,000 0%
Over £125,000 – £250,000 2% Over £150,000 – £250,000 2%
Over £250,000 – £925,000 5% Above £250,000 5%
Over £925,000 – £1.5m 10%
Above £1.5m 12%
*From 1 October 2021, first-time buyers pay nothing on the first £300,000 for properties up to £500,000. A 5% rate will also apply between £300,000 and £500,000.
**Until 30 June 2021, the nil-rate threshold is £500,000. On 1 July 2021, the nil-rate threshold reduces to £250,000 until 30 September 2021.

For residential purchases by ‘non-natural persons’ over £500,000 a rate of 15% applies, subject to certain exclusions.
Scotland: Land and buildings transaction tax
On transfer of residential property* On transfer of non-residential property
£0 – £145,000 0% £0 – £150,000 0%
Over £145,000 – £250,000 2% Over £150,000 – £250,000 1%
Over £250,000 – £325,000 5% Above £250,000 5%
Over £325,000 – £750,000 10%
Above £750,000 12%
*First-time buyers pay nothing on the first £175,000.

Wales: Land transaction tax (from 1.7.21)
On transfer of residential property On transfer of non-residential property
£0 – £180,000* 0% £0 – £225,000 0%
Over £180,000 – £250,000** 3.5% Over £225,000 – £250,000 1%
Over £250,000 – £400,000 5% Over £250,000 – £1m 5%
Over £400,000 – £750,000 7.5% Above £1m 6%
Over £750,000 – £1.5m 10%
Above £1.5m 12%
*Until 30 June 2021, the nil-rate threshold is £250,000.
**Until 30 June 2021, the 3.5% rate does not apply.
IMPORTANT NOTICE
These rates and allowances are based on Budget 2021 announcements made by the UK and Northern Ireland, Scottish and Welsh Governments and are for information only.
All information is subject to change before 6 April 2021 and confirmation by the respective governments. The above must not be considered advice and no warranty is given for the accuracy or completeness of the details. Professional advice should be sought before making any decisions.
Rates apply to the UK and Northern Ireland unless stated otherwise.