Rates and Allowances 2020/21
INCOME TAX
Rates and bands (other than savings and dividend income)
Income tax rates in Scotland and Wales on income other than savings and dividend income have been devolved.
A starting rate of 0% may be available unless taxable non-savings income exceeds £5,000.
INCOME TAX RELIEFS
INDIVIDUAL SAVINGS ACCOUNTS
PENSIONS
However for those on higher incomes, the annual allowance is reduced accordingly, The minimum level to which the annual allowance can taper down will reduce from £10,000 to £4,000 from 6 April 2020
DEVOLVED INCOME TAX
Scotland rates and bands
Wales rates and bands
NATIONAL INSURANCE
2020/21 Class 1 (employed) rates
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
INHERITANCE TAX
A further nil rate band of £175,000 (£150,000 for 2019/20) may be available in relation to current or former residences.
CAR, VAN AND FUEL BENEFITS
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 over 75g/km if the CO2 figure does not end in a 5 or 0 round down to the nearest 5 or 0.
CAPITAL ALLOWANCES
First Year Allowance (FYA)
100%
on certain plant, machinery and cars up to 50g/km
Annual Investment Allowance (AIA)
Excludes cars and expenditure already qualifying for FYA
£1,000,000 (£200,000 from 1 January 2021)
Writing Down Allowance
Expenditure not qualifying for AIA or FYA:
Long-life assets, integral features of buildings, cars over 110g/km
Other plant and machinery
6%
18%
Structures and Buildings Allowance
From April 2020
3%
CORPORATION TAX
VAT
CAPITAL GAINS TAX
Higher rates (18/28%) may apply to the disposal of certain residential property and carried interest
Entrepreneurs’ Relief
The first £10m of lifetime qualifying gains were charged at 10%. This was reduced to £1m for disposals on or after 11 March 2020 subject to certain transitional rules
PROPERTY TAXES
Across the whole of the UK, residential rates may be increased by 3% (4% in Scotland) where further residential properties are acquired.
Stamp Duty Land Tax
Land and buildings in England and N. Ireland
First-Time Buyer relief may apply to residential purchases up to £500,000.
Land and Buildings Transaction Tax
Land and buildings in Scotland
First-Time Buyer relief may apply on the first £175,000 of residential purchases.
Land Transaction Tax
Land and buildings in Wales
First-Time Buyer relief may apply to residential purchases up to £500,000.
For more information, speak to one of our team
This summary is published for the information of clients. It provides only an overview of the main points, and no action should be taken without consulting the detailed legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this summary can be accepted by the authors or the firm.