- enquiries@rbsca.com
- 0207 537 9043
The tax-free personal allowance throughout the UK will increase to £12,570 for the 2021/22 tax year.
The basic-rate band will rise to £37,700, while the higher-rate threshold will rise to £50,270. The additional-rate band will remain at £150,000.
All of these thresholds will remain unchanged until 2025/26.
In Scotland, the starter rate will rise to £14,667 and the basic rate will increase to £25,296. The intermediate rate will also rise to £43,662. The top rate will remain frozen for income over £150,000.
The national living wage now applicable to over-23s increases by 2.2% from £8.72 an hour to £8.91 an hour from April 2021.
The threshold for class 1 primary contributions paid by employees and the class 4 national insurance contributions (NICs) paid by the self-employed will increase from £9,500 to £9,568 for the 2021/22 tax year.
From April 2021, the upper earnings limit and upper profits limit will increase from £50,000 to £50,270.
At the same time, the class 2 NICs rate for the self-employed will remain at £3.05 a week for 2021/22, while the self-employed small profits threshold will rise to £6,515.
All of the subscription limits will remain unchanged. For ISAs, this will be £20,000 and for Junior ISAs and child trust funds it will be £9,000.
At present, an unincorporated business, such as a sole trader or partner in a partnership, can claim to offset losses against their net income of the current or previous year, or both years.
For trading losses made in 2020/21 and 2021/22, you will be able to carry back for a period of three years, with losses being carried back against later years first. Some further restrictions apply.
The current annual exempt amount for individuals and personal representatives of £12,300 and £6,150 for trustees of settlements will be maintained at these levels for each tax year up to and including the 2025/26 tax year.
The lifetime limit on qualifying gains for business asset disposal relief will remain at £1m for 2021/22.
The lifetime limit for investors' relief will also be kept at the current level of £10m. The 10% tax rate remains unchanged.
Gift holdover relief will not be available where a non-UK resident person disposes of an asset to a foreign-controlled company, controlled either by themselves or another non-UK resident with whom they are connected. This measure will apply to disposals made on or after 6 April 2021.
From 6 April 2021, the company van benefit which arises where a van is made available to an employee for private use will increase to £3,500.
The company car fuel benefit multiplier increases from £24,500 to £24,600 from 6 April 2021.
The flat rate charge for the van fuel benefit will increase from £666 to £669 from 6 April 2021.
The lifetime allowance for pension savings will remain at £1,073,100 until the 2025/26 tax year.
The transferable marriage allowance will increase from £1,250 to £1,260 for 2021/22.
Inheritance tax
The individual nil-rate band will continue at £325,000 and the residence nil-rate band will also remain at £175,000. The taper threshold for the residence nil-rate band continues to start at £2m.
The previous end date of the social investment tax relief of 6 April 2021 has been extended to 6 April 2023.
This applies to investments in qualifying social enterprises and will allow income tax relief and capital gains tax holdover relief for investors to continue.
| Band |
2021/22 |
Rate |
2020/21 |
Rate |
| Personal allowance | Up to £12,570 | Nil | Up to £12,500 | Nil |
| Basic-rate | Over £12,570 – £50,270 | 20% | Over £12,500 – £50,000 | 20% |
| Higher-rate | Over £50,270 – £150,000 | 40% | Over £50,000 – £150,000 | 40% |
| Additional-rate | Above £150,000 | 45% | Above £150,000 | 45% |
*The personal allowance is reduced by £1 for every £2 of income from £100,000 to £125,140.
Register your details and we’ll send you regular updates.
