In the March budget the Chancellor announced he would be freezing all tax allowances and thresholds from 2021/22 until 2026, but there were some pre planned changes coming in anyway.
The changes are detailed below:
|Basic Rate Tax (20%)||Up to £37,500||Up to £37,700|
|Higher Rate Tax (40%)||£37,501 – £150,000||£37,701 – £150,000|
|Additional Rate Tax (45%)||£150,001+||£150,001+|
The income limit for the tapering of the Personal Allowance remains at £100,000.
Dividend tax rates will remain the same:
|Basic Rate and Non Tax Payers||7.50%|
Class 1 Weekly Threshold:
|Lower Earnings Limit||£120||£120|
|Primary Threshold (When NI is paid)||£183||£184|
|Secondary Threshold (Employers pay NI)||£169||£170|
|Upper Earnings Limit (Employees pay lower rate of NI)||£962||£967|
The class 1 rates will remain at:
|Employers NI above Secondary Threshold||13.80%|
|Employee NI above Primary Threshold||12%|
|Employee NI above Upper Earnings Limit||2%|
Class 2 NI:
|Small Profits Threshold||£6,475||£6,515|
|Rate per week||£3.05||£3.05|
Class 3 NI:
The weekly rate for voluntary Class 3 NI will increase from £15.30pw to £15.40pw.
Class 4 NI:
|Lower Profits Limit||£9,500||£9,568|
|Upper Profits Limit||£50,000||£50,270|
|Rate between LPL and UPL||9%||9%|
|Rate above UPL||2%||2%|
Capital Gains Tax
The annual exempt amount will remain at £12,300 for individuals.
For trusts this will remain up to a maximum of £6,150, dependent upon how many trusts a settlor has created.
The Residence Nil Rate Band remains at up to £175,000 per person, or the value held in a main residence if lower. This only applies if a property is left to a direct descendant (children or grandchildren).
The Nil Rate Band remains at £325,000 per person.
Each of these allowances is inheritable by a surviving spouse although the Residence Nil Rate Band can be tapered away for estates valued at above £2m.