Tax Rates & Allowances
Our Tax Rate Centre includes a summary of the most important tax rates and allowances for the tax year 2020/2021.
It is not intended to cover every aspect of this year’s tax figures and is designed to act as overview only. No liability is accepted for any action taken or refrained from in consequence of its contents. Advice should always be sought from a professional.
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| Band & Rates | 2020 / 2021 | 2019 / 2020 |
| Basic Rate – income up to | £37,500 | £37,500 |
| Main Basic Rate | 20% | 20% |
| Savings Basic Rate | 20% | 20% |
| Default Basic Rate | 20% | 20% |
| Starting rate for savings income | 0% | 0% |
| Starting Rate limit (saving income) | £5,000 | £5,000 |
| Dividend ordinary rate – for dividends otherwise taxable at the basic rate | 7.5% | 7.5% |
| Higher Rate – income over | £37,500 | £37,500 |
| Main Higher Rate | 40% | 40% |
| Savings Higher Rate | 40% | 40% |
| Default Higher Rate | 40% | 40% |
| Dividend upper rate – for dividends otherwise taxable at the higher rate | 32.5% | 32.5% |
| Additional Rate – income over | £150,000 | £150,000 |
| Main Additional Rate | 45% | 45% |
| Savings Additional Rate | 45% | 45% |
| Default Additional Rate | 45% | 45% |
| Dividend additional rate – for dividends otherwise taxable at the additional rate | 38.1% | 38.1% |
| Trustee’s Income | ||
| Standard rate on first £1,000 of income which would otherwise be taxable at the special rates for trustees | Up to 20%, depends on the type of income | Up to 20%, depends on the type of income |
| Trust Rate | 45% | 45% |
| Dividend Trust Rate | 38.1% | 38.1% |
| Income Tax Allowances | 2020 / 2021 | 2019 / 2020 |
| Personal Allowance | £12,500 | £12,500 |
| Income limit for Personal Allowance | £100,000 | £100,000 |
| Income limit for married couples allowance | £30,200 | £29,600 |
| Maximum Married couple’s allowance for those born before 6 April 1935 | £9,075 | £8,915 |
| Minimum Married couple’s allowance for those born before 6 April 1935 | £3,510 | £3,450 |
| Blind persons allowance | £2,500 | £2,450 |
| Transferrable Marriage Allowance | £1,250 | £1,250 |
| Dividend Allowance | £2,000 | £2,000 |
| Personal savings allowance for basic rate taxpayer | £1,000 | £1,000 |
| Personal savings allowance for higher rate taxpayer | £500 | £500 |
National Minimum Wage
Use the National Minimum Wage calculator to check if you’re paying a worker the National Minimum Wage or if you owe them payments from past years. The rates, below, apply from 1 April 2020.
| Category of worker | Hourly Rate |
| Aged 25 and above (national living wage rate | £8.72 |
| Aged 21 to 24 inclusive | £8.20 |
| Aged 18 to 20 inclusive | £6.45 |
| Under 18 (but above compulsory school leaving age) | £4.55 |
| Apprentices aged under 19 | £4.15 |
| Apprentices aged 19 and over, but in the first year of their apprenticeship | £4.15 |
Student Loan Recovery
| Rate of threshold | Figures to use 2020/2021 |
| Employee earnings threshold for Plan 1 | £19,390 per year £1,615.83 per month £372.88 per week |
| Employee earnings threshold for Plan 2 | £26,575 per year £2,214.58 per month £511.05 per week |
| Student loan deductions | 9% |
| Employee earnings threshold for Postgraduate Loan | £21,000 per year £1,750 per month £403.84 per week |
| Student loan deductions | 6% |
| Class 1 NICs: Employee and Employer rates and thresholds per week | 2020 / 2021 | 2019 / 2020 |
| Weekly Lower Earnings Limit (LEL) | £120 | £118 |
| Weekly Primary Threshold (PT) | £183 | £166 |
| Weekly Secondary Threshold (ST) | £169 | £166 |
| Upper Earnings (UEL) | £962 | £962 |
| Upper Secondary Threshold for U21’s | £962 | £962 |
| Apprentice Upper Secondary Threshold (AUST) for under 25s | £962 | £962 |
| Employment Allowance (per employer) | £4,000/year | £3,000/year |
| Employee’s (primary) Class 1 contribution rates | ||
| Below LEL | 0% | 0% |
| LEL – PT | 0% | 0% |
| PT – UEL | 12% | 12% |
| Above UEL | 2% | 2% |
| Maried woman’s reduced rate for (primary) Class 1 contribution rates | ||
| Weekly earnings from between the PT and UEL | 5.85% | 5.85% |
| Weekly earnings from above UEL | 2% | 2% |
| Employer’s (secondary) Class 1 contribution rates | ||
| Below ST | 0% | 0% |
| Above ST | 13.8% | 13.8% |
| Employer’s (secondary) Class 1 contribution rates for employees under 21 | ||
| Below UST | 0% | 0% |
| Above UST | 13.8% | 13.8% |
| Employer’s (secondary) Class 1 contribution rates for Apprentices under 25 | ||
| Below AUST | 0% | 0% |
| Above AUST | 13.8% | 13.8% |
| Class 2 NICs: Self-employed rates and thresholds per week | 2020 / 2021 | 2019 / 2020 |
| Small Profits Threshold (SPT) | £6,475 | £6,365 |
| Annual profits | ||
| Below SPT | £0/week | £0/week |
| Above SPT | £3.05 | £3.00 |
| Special Class 2 rate for share fishermen | £3.70 | £3.65 |
| Special Class 2 rate for volunteer development workers | £6.00 | £5.90 |
| Class 3 NICs: Other rates and thresholds per week | 2020 / 2021 | 2019 / 2020 |
| Voluntary contributions | £15.30 | £15.00 |
| Class 4 NICs: Self-employed rates and thresholds per year | 2020 / 2021 | 2019 / 2020 |
| Lower Profits Limit (LPL) | £9,500 | £8,632 |
| Upper Profits Limit (UPL) | £50,000 | £50,000 |
| Below LPL | 0% | 0% |
| LPL to UPL | 9% | 9% |
| Above UPL | 2% | 2% |
| Class 1 NICs: Thresholds | Week | Month | Year |
| Lower earnings limit (LEL) | £120 | £520 | £6,240 |
| Primary Threshold (PT) | £183 | £792 | £9,500 |
| Secondary Threshold (ST) | £169 | £732 | £8,788 |
| Upper Secondary Threshold (under 21) (UST) and Apprentice Upper Secondary Threshold (apprentice under 25) (AUST) | £962 | £4,167 | £50,000 |
| Upper earnings limit (UEL) | £962 | £4,167 | £50,000 |
Class 1 NICs: rates for employee (primary) contributions
| NICs category letter | Earnings at or above LEL up to and including PT | Earnings above PT up to and including UEL | Balance of earnings above UEL |
| A | 0% | 12% | 2% |
| B | 0% | 5.85% | 2% |
| C | NIL | NIL | NIL |
| H (Apprentice under 25) | 0% | 12% | 2% |
| J | 0% | 2% | 2% |
| M (under 21) | 0% | 12% | 2% |
| Z (under 21 – deferment) | 0% | 2% | 2% |
Class 1 NICs: rates for employer (secondary) contributions
NICs deductions should not be made on earnings below the Lower Earnings Limit (LEL).
| NICs category letter | Earnings at or above LEL up to and including ST | Earnings above ST up to and including UEL / UST / AUST | Balance of earnings above UEL / UST / AUST |
| A | 0% | 13.8% | 13.8% |
| B | 0% | 13.8% | 13.8% |
| C | 0% | 13.8% | 13.8% |
| H (under 25 | 0% | 0% | 13.8% |
| J | 0% | 13.8% | 13.8% |
| M (under 21) | 0% | 0% | 13.8% |
| Z (under 21 deferment) | 0% | 0% | 13.8% |
| Working Tax Credit – £ per year (unless stated) | 2020 / 2021 | 2019 / 2020 |
| Basic element | £1,995 | £1,960 |
| Couple and lone parent element | £2,045 | £2,010 |
| 30 hour element | £825 | £810 |
| Disabled worker element | £3,220 | £3,165 |
| Severe disability element | £1,390 | £1,365 |
| Childcare element of the Working Tax Credit – £ per year (unless stated) | 2020 / 2021 | 2019 / 2020 |
| Maximum eligible cost for one child | £175/week | £175/week |
| Maximum eligible cost for two or more children | £300/week | £300/week |
| Percentage of eligible costs covered | 70% | 70% |
| Child Tax Credit – £ per year (unless stated) | 2020 / 2021 | 2019 / 2020 |
| Child Tax Credit Family element | £545 | £545 |
| Child element | £2,830 | £2,780 |
| Disabled child element | £3,415 | £3,355 |
| Severely disabled child element | £4,800 | £4,715 |
| Child Benefit – £ per week | 2020 / 2021 | 2019 / 2020 |
| Eldest/Only Child | £21.05 | £20.70 |
| Other Children | £13.95 | £13.70 |
| Guardian Allowance – £ per week | 2020 / 2021 | 2019 / 2020 |
| Guardian’s Allowance | £17.90 | £17.60 |
| Income thresholds and withdrawal rates – £ per year (unless stated) | 2020 / 2021 | 2019 / 2020 |
| First income threshold | £6,530 | £6,420 |
| First withdrawal rate (per cent) | 41% | 41% |
| First threshold for those entitled to Child Tax Credit only | £16,385 | £16,105 |
| Income disregard | £2,500 | £2,500 |
| Income Fall Disregard | £2,500 | £2,500 |
| Type of payment or recovery | Figures to use 2020/2021 |
| Statutory Maternity Pay (SMP) – weekly rate for first six weeks | 90% of the employee’s average weekly earnings |
| Statutory Maternity Pay (SMP) – weekly rate for remaining weeks | £151.20 or 90% of the employee’s average weekly earnings, whichever is lower |
| Statutory Paternity Pay (SPP) – weekly rate | £151.20 or 90% of the employee’s average weekly earnings, whichever is lowe |
| Statutory Adoption Pay (SAP) – for first 6 weeks | 90% of employee’s average weekly earnings |
| Statutory Adoption Pay (SAP) – weekly rate for remaining weeks | £151.20 or 90% of the employee’s average weekly earnings, whichever is lower |
| Statutory shared parental pay (ShPP) | £151.20 or 90% of the employee’s average weekly earnings, whichever is lower |
| Statutory Parental Bereavement Pay (SPBP) – weekly rate (applies from 6 April 2020) | £151.20 or 90% of the employee’s average weekly earnings, whichever is lower |
| SMP/SPP/ShPP/SAP – proportion of your payments you can recover from HMRC | 92% if your total Class 1 NICs (both employee and employer contributions) are above £45,000 for the previous tax year.
103% if your total Class 1 National Insurance for the previous tax year is £45,000 or lower |
Statutory Sick Pay
The same weekly Statutory Sick Pay rate applies to all employees. However, the amount you must actually pay an employee for each day they’re off work due to illness (the daily rate) depends on the number of ‘qualifying days’ they work each week.
| SSP 2020/2021 | Rate of payment or recovery (rounded in brackets) |
| Standard weekly rate | £95.85 (N/A) |
| Daily rate – employees with 1 qualifying day in the week | £95.85 (£95.85) |
| Daily rate – employees with 2 qualifying days in the week | £47.93 (£47.9250) |
| Daily rate – employees with 3 qualifying days in the week | £31.95 (£31.95) |
| Daily rate – employees with 4 qualifying days in the week | £23.97 (£23.9625) |
| Daily rate – employees with 5 qualifying days in the week | £19.17 (£19.17) |
| Daily rate – employees with 6 qualifying days in the week | £15.98 (£15.9750) |
| Daily rate – employees with 7 qualifying days in the week | £13.70 (£13.6928) |
Chargeable on employees earning £8,500 or over (including benefits), and directors.
Car Benefits
The taxable benefit is calculated as a percentage of the list price of the car, on the day before it was first registered, plus certain accessories. This percentage depends upon the rate at which the car emits carbon dioxide (CO2), and the fuel type.
For low emission hybrid cars (below 50gm of CO2 per kilometre), the rate depends on the electric range. 2020/21 rates range from 0% (for an electric range over 130 miles) to 12% (range below 30 miles).
For 2020/21, the rates range from 0% (for cars with zero emissions) up to 37%, with more polluting diesel cars paying an extra 2%. The rates for different emissions depend on whether the car was registered before or after 6 April 2020.
Cars first registered before 6 April 2020
| CO2 (g/km) | Electric Range (Miles) | Appropriate % |
| 0 | N/A | 0% |
| 1-50 | >130 | 2% |
| 1-50 | 70-129 | 5% |
| 1.50 | 40-69 | 8% |
| 1-50 | 30-39 | 12% |
| 1-50 | <30 | 14% |
| 51-54 | 15% | |
| 55-59 | 16% | |
| 60-64 | 17% | |
| 65-69 | 18% | |
| 70-74 | 19% | |
| 75-79 | 20% | |
| 80-84 | 21% | |
| 85-89 | 22% | |
| 90-94 | 23% | |
| 95-99 | 24% |
| CO2 (g/km) | Electric Range (miles) | Appropriate % |
| 100-104 | 25% | |
| 105-109 | 26% | |
| 110-114 | 27% | |
| 115-119 | 28% | |
| 120-124 | 29% | |
| 125-129 | 30% | |
| 130-134 | 31% | |
| 135-139 | 32% | |
| 140-144 | 33% | |
| 145-149 | 34% | |
| 150-154 | 35% | |
| 155-159 | 36% | |
| 160+ | 37% |
Cars first registered on or after 6 April 2020
| CO2 (g/km) | Electric Range (Miles) | Appropriate % |
| 0 | N/A | 0% |
| 1-50 | >130 | 0% |
| 1-50 | 70-129 | 3% |
| 1.50 | 40-69 | 6% |
| 1-50 | 30-39 | 10% |
| 1-50 | <30 | 12% |
| 51-54 | 13% | |
| 55-59 | 14% | |
| 60-64 | 15% | |
| 65-69 | 16% | |
| 70-74 | 17% | |
| 75-79 | 18% | |
| 80-84 | 19% | |
| 85-89 | 20% | |
| 90-94 | 21% | |
| 95-99 | 22% |
| CO2 (g/km) | Electric Range (miles) | Appropriate % |
| 100-104 | 23% | |
| 105-109 | 24% | |
| 110-114 | 25% | |
| 115-119 | 26% | |
| 120-124 | 27% | |
| 125-129 | 28% | |
| 130-134 | 29% | |
| 135-139 | 30% | |
| 140-144 | 31% | |
| 145-149 | 32% | |
| 150-154 | 33% | |
| 155-159 | 34% | |
| 160-164 | 35% | |
| 165-169 | 36% | |
| 170+ | 37% |
Diesel
For all cars, drivers must add 4% to their appropriate percentage if the car is propelled solely by diesel (up to a maximum of 37%). Cars that meet the Real Driving Emissions Step 2 (RDE2) standard are exempt from the diesel supplement.
Finding your CO2
To find out how much CO2 your company car emits, you may wish to do one of the following: check the cars V5 Registration Document; contact your Dealer; vist the Vehicle Certification Agency Website;.
To access the HMRC Car & Fuel Benefits Calculator, please click here.
Company cars: advisory fuel rates
These rates apply to all journeys on or after 1 March 2020 until further notice, allowing them to reflect fuel prices more quickly. For one month from the date of change, employers may use either the previous or new current rates, as they choose. Employers may therefore make or require supplementary payments if they so wish, but are under no obligation to do either. Petrol hybrid cars are treated as petrol cars for this purpose. If the employee pays for the full cost of all fuel for private journeys (usually including home to work) there will be no car fuel benefit. In all other cases the full tax charge will be due. The Car fuel benefit charge multiplier for 2020/2021 is £24,500.
| Engine size | Petrol | Diesel | LPG |
| 1400cc or smaller | 12p | N/A | 8p |
| 1401cc to 2000cc | 14p | N/A | 10p |
| Bigger than 2000cc | 20p | N/A | 14p |
| Less than 1600cc | N/A | 9p | N/A |
| 1601cc – 2000cc | N/A | 11p | N/A |
| Bigger than 2000cc | N/A | 13p | N/A |
Advisory electricity rate for fully electric cars
Amount per mile – 4 pence. Electricity is not a fuel for car fuel benefit purposes.
Company vans
The taxable benefit for the unrestricted use of company vans is £3,490 (with no reduction for older vans) plus a further £666 of taxable benefit if fuel is provided by the employer for private travel.
| Van and fuel charge | Van | Fuel | Total |
| Tax (20% taxpayer) | £698 | £133.20 | £831.20 |
| Tax (40% taxpayer) | £1,396 | £266.40 | £1,662.40 |
| Tax (45% taxpayer) | £1,570.50 | £299.70 | £1,870.20 |
| Employer’s class 1A NICs | £481.62 | £91.91 | £573.53 |
Fuel Benefit and Van Benefit charge
| Income Tax Allowances | 2020 / 2021 | 2019 / 2020 |
| Car fuel benefit charge multiplier | £24,500 | £24,100 |
| Van fuel benefit charge | £666 | £655 |
| Van benefit charge | £3,490 | £3,430 |
Employee vehicles: mileage payments for business travel
| Type of vehicle | Rate per business mile 2020-21 |
| Car | For tax purposes: 45p for the first 10,000 business miles in a tax year, then 25p for each subsequent mile.
For NICs purposes:45p for all business miles |
| Motorcycle | 24p for both tax and NICs purposes and for all business miles |
| Cycle | 20p for both tax and NICs purposes and for all business miles |
Passenger payments: Cars and Vans
5p per passenger per business mile for carrying fellow employees in a car or van on journeys which are also work journeys for them. Only payments specifically for carrying passengers count and there is no relief if you receive less, or nothing at all.
VED bands and rates for cars first registered on or after 1 April 2018.
Budget 2018 announced that new diesel vehicles registered after 1 April 2018 that do not meet the real driving emission step 2 (RDE2) standard will be charged a supplement on their First Year Rate to the effect of moving up by one VED band.
| CO2 emissions (g/km) | Standard Rate | First Year Rate |
| 0 | £0 | £0 |
| 1-50 | £150 | £10 |
| 51-75 | £150 | £25 |
| 76-90 | £150 | £110 |
| 91-100 | £150 | £135 |
| 101-110 | £150 | £155 |
| 111-130 | £150 | £175 |
| 131-150 | £150 | £215 |
| 151-170 | £150 | £540 |
| 171-190 | £150 | £870 |
| 191-225 | £150 | £1,305 |
| 226-255 | £150 | £1,850 |
| Over 255 | £150 | £2,175 |
VED bands and rates for cars registered on or after March 2001.
| VED Band | CO2 emissions (g/km) | Tax Year 2020 to 2021 | Tax Year 2019 to 2020 |
| A | Up to 100 | £0 | £0 |
| B | 101-110 | £20 | £20 |
| C | 111-120 | £30 | £30 |
| D | 121-130 | £130 | £125 |
| E | 131-140 | £150 | £145 |
| F | 141-150 | £165 | £160 |
| G | 151-165 | £205 | £200 |
| H | 166-175 | £240 | £235 |
| I | 176-185 | £265 | £260 |
| J | 186-200 | £305 | £300 |
| K | 201-225 | £330 | £325 |
| L | 226-255 | £565 | £555 |
| M | Over 255 | £580 | £570 |
2020/2021 Road Tax for cars & vans registered before 1 March 2001
| Engine Size | 2020 / 2021 | 2019 / 2020 |
| 1549cc and below | £165 | £160 |
| Above 1549cc | £270 | £265 |
2020/2021 Road Tax for vans registered after 1 March 2001
| Vehicle registration date | 2020 / 2021 | 2019 / 2020 |
| Early Euro 4 and Euro 5 compliant vans | £140 | £140 |
| All other vans | £265 | £260 |
The Basic State Pension applies if you are;
- a man born before 6 April 1951
- a woman born before 6 April 1953
The basic State Pension is a regular payment from the government that you can get if you reached State Pension age before 6 April 2016. To get it, you must have paid or been credited with National Insurance contributions. The most you can currently get is £134.25 per week. The basic State Pension increases every year by whichever is the highest of the following:
- earnings – the average percentage growth in wages (in Great Britain)
- prices – the percentage growth in prices in the UK as measured by the Consumer Prices Index (CPI)
2.5%
| Basic state pension | 2020 / 2021 | 2019 / 2020 |
| Single person per year | £6,981 | £6, 718.40 |
| Spouse/civil partner addition per year | £4,183.40 | £4,027.40 |
| Married couple/civil partnership total per year | £11,167 | £10,745.80 |
| Maximum age for tax relief | 74 | 74 |
| Minimum age for taking benefits | 55 | 55 |
| Lifetime allowance charge – lump sum paid | 55% | 55% |
| Lifetime allowance charge – monies retained | 25% | 25% |
| On cumulative benefits exceeding | £1,073,100 | £1,055,000 |
| Annual allowance | £40,000 | £40,000 |
| Maximum tax-free lump sum | 25% | 25% |
| Money Purchase Annual Allowance | £4,000 | £4,000 |
| Tapered Annual Allowance (applies when an individual has ‘adjusted income’ over this amount provided the ‘threshold income’ test is met) | £240,000 | £150,000 |
New State Pension
You’ll be able to claim the new State Pension if you’re:
- a man born on or after 6 April 1951
- a woman born on or after 6 April 1953
If you reached State Pension age before 6 April 2016, you’ll get the State Pension under the old rules instead. The earliest you can get the new State Pension is when you reach State Pension age. The most you can currently get is £175.20 per week.
Your National Insurance record
You’ll usually need at least 10 qualifying years on your National Insurance record to get any State Pension. They don’t have to be 10 qualifying years in a row.
This means for 10 years at least one or more of the following applied to you:
- you were working and paid National Insurance contributions
- you were getting National Insurance credits for example if you were unemployed, ill or a parent or carer
- you were paying voluntary National Insurance contributions
If you’ve lived or worked abroad you might still be able to get some new State Pension.
You might also qualify if you’ve paid married women’s or widow’s reduced rate contributions.
Working after State Pension age
You don’t have to stop working when you reach State Pension age but you’ll no longer have to pay National Insurance. You can also request flexible working arrangements.
Tax Free Savings Accounts
| Tax year 2020 to 2021 | Tax year 2019 to 2020 | |
| Individual Savings Account (ISA) subscription limit | £20,000, of which £4,000 can be saved into a Lifetime ISA | £20,000, of which £4,000 can be saved into a Lifetime ISA |
| Junior ISA subscription limit | £9,000 | £4,368 |
| Child Trust Fund (CTF) subscription limit | £9,000 | £4,368 |
| Group | 2020 / 2021 | 2019 / 2020 |
| Main rates for individuals | 10% / 20% | 10% / 20% |
| Rates for individuals (for gains on residential property not eligible for Private Residence Relief, and carried interest) | 18 % / 28% | 18 % / 28% |
| Main rate for trustees and personal representatives | 20% | 20% |
| Rate for trustees and personal representatives (for gains on residential property not eligible for Private Residence Relief) | 28% | 28% |
| Rate for personal representatives for gains on carried interest | 28% | 28% |
| Annual exempt amount (AEA) for individuals and personal representatives | £12,300 | £12,000 |
| AEA for most trustees | £6,150 | £6,000 |
| Rate on gains subject to entrepreneurs’ relief | 10% | 10% |
| Rate on gains subject to investors’ relief | 10% | 10% |
| Business Asset Disposal Relief (previously known as Entrepreneurs’ relief): lifetime limit on gains for entrepreneurs | £1,000,000 | £10,000,000 |
| Investors’ relief: separate lifetime limit on gains for external investors | £10,000,000 | £10,000,000 |
| Level of profits | From 01/04/18 | From 01/04/19 | From 01/04/20 |
| Main rate | 19% | 19% | 19% |
Corporation Tax Allowances & Reliefs
| Financial Year 2019 to 2020 | Financial Year 2020 to 2021 | Financial Year 2021 to 2022 | |
| Plant and machinery: main rate expenditure | 18% | 18% | 18% |
| Plant and machinery: special rate expenditure | 6% | 6% | 6% |
| Structures and Buildings Allowances(SBA) | 2% | 3%1 | 3% |
| Annual investment allowance (AIA) | £1,000,000 | £1m / £200,0002 | £200,000 |
| First year allowances (e.g. for certain energy-saving/water efficient products) | 100% | N/A3 | N/A |
| R&D tax credits SME scheme | 230% | 230% | 230% |
| R&D SME payable credit | 14.5% | 14.5% | 14.5% |
| R&D Expenditure Credit | 12% | 13% | 13% |
| Patent Box | 10% | 10% | 10% |
| Film tax relief | 25% | 25% | 25% |
| High-end TV tax relief | 25% | 25% | 25% |
| Videogames tax relief | 25% | 25% | 25% |
| Open ended investment companies and authorised unit trusts | 20% | 20% | 20% |
1. Structures and Building Allowance will be increased from 2% to 3% from April 2020.
2. An Annual Investment Allowance of £1m will apply to investments made from 1 January 2019 until 31 December 2020. The AIA for investments before and after those dates will be £200,000.
3. From 1 April 2020 for incorporated businesses and from 6 April 2020 for unincorporated businesses, environmental enhanced capital allowances will be abolished
| Vat Rates | April 2020/2021 | April 2019/2020 |
| Standard Rate | 20% | 20% |
| Vat Fraction | 1/6 | 1/6 |
| Reduced Rate | 5% | 5% |
| Taxable Turnover Limits | Amounts |
| Registration – last 12 months or next 30 days over | £85,000 from 1 April 2020 |
| Deregistration – next 12 months under | £83,000 from 1 April 2020 |
| Cash accounting scheme – up to | £1,350,000 |
| Optional flat rate scheme – up to | £150,000 |
| Annual accounting scheme – up to | £1,350,000 |
From 6 April 2020, everyone has an additional xx£150,000 tax-free allowance to use against the value of their home.
| Detail | 2020/2021 | 2019/2020 |
| Standard threshold | £325,000 | £325,000 |
| Residence nil rate band limit | £175,000 | £150,000 |
| Rate of tax on balance: | ||
| Chargeable lifetime transfers | 20% | 20% |
| Transfers on, or within 7 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 purpose of calculating the tax payable. Tax attributable to such transfers is then reduced:
| Years before death | 0 – 3 | 3 – 4 | 4 – 5 | 5 – 6 | 6 – 7 |
| Tax paid | 40% | 32% | 24% | 16% | 8% |
Main Reliefs
| Business Property | % |
| Business or interest therein | 100% |
| Qualifying shareholdings in unquoted* companies | 100% |
| Shares controlling more than 50% of the voting rights in a listed company | Land, buildings or machinery owned by the deceased and used in a business they were a partner in or controlled | Land, buildings or machinery used in the business and held in a trust that it has the right to benefit from | 50% |
| Agricultural property | 50% or 100% |
* Unquoted companies include those listed on AIM
Main Exemptions
- Most transfers between spouses and civil partners.
- The first £3,000 of lifetime transfers in any tax year plus any unused balance from previous year.
- Gifts of up to but not exceeding £250 p.a. to any number of persons.
- Gifts in consideration of marriage or civil partnership of: up to £5,000 by a parent, up to £2,500 by a grandparent, or up to £1,000 by any other person.
- Gifts made out of income that form part of normal expenditure and do not reduce the standard of living.
- Gifts to charities, whether made during lifetime or on death.
- From April 2012, a reduced rate of IHT of 36% will be introduced where 10 per cent of more of the net estate is left to charity.
Stamp Duty Land Tax – Residential Property
| Property Value | Rate (on portion of value above threshold) | Rate (on portion of value above threshold) on or after 1 April 2016 if purchase is of an additional residential property |
| 0 to £125,000 | 0% | 3% |
| £125,000 to £250,000 | 2% | 5% |
| £250,000 to £925,000 | 5% | 8% |
| £925,000 to £1.5 million | 10% | 13% |
| £1.5 million + | 12% | 15% |
Stamp Duty Land Tax – Non-residential Property
| Property Value | Rate on or after 17 March 2016 (on portion of value above threshold) |
| 0 to £150,000 | 0% |
| £150,000 to £250,000 | 2% |
| £250,000 + | 5% |
| Net Present value (NPV) of the Lease | Rate on or after 17 March 2016 (on portion of value above threshold) |
| 0 to £150,000 | 0% |
| £150,000 to £5 million | 1% |
| £5 million + | 2% |
Stamp Duty Land Tax – rates for first-time buyers purchasing properties worth £500,000 or less
| Property Value | Rate (on portion of value above threshold) on or after 22 November 2017 if purchase qualifies for first-time buyer relief |
| 0 to £300,000 | 0% |
| £300,000 to £500,000 | 5% |
| £500,000 + | Standard rates above apply |
Annual tax on Enveloped Dwellings
| Property Value | Charge for tax year 2020 to 2021 | Charge for tax year 2019 to 2020 |
| More than £500,000 but not more than £1 million | £3,700 | £3,650 |
| More than £1 million but not more than £2 million | £7,500 | £7,400 |
| More than £2 million but not more than £5 million | £25,200 | £24,800 |
| More than £5 million but not more than £10 million | £58,850 | £57,900 |
| More than £10 million but not more than £20 million | £118,050 | £116,100 |
| More than £20 million+ | £236,250 | £232,350 |
Tax Calendar check if items still valid – dates already changedy
| April 2020 | |
| 5 | Last day of 2019/20 tax year. Deadline for 2019/20 ISAs. Last day to make disposals using the 2019/20 CGT exemption. |
| 14 | Due date for income tax for the CT61 period to 31 March 2020. |
| 19/22 | Quarter 4 2019/20 PAYE remittance due. |
| 20 | Interest will begin to accrue on unpaid PAYE/NI for 2019/20. |
| 30 | Normal annual adjustment for VAT partial exemption calculations (monthly returns). |
| May 2020 | |
| 1 | Start of daily penalties for 2019 online Tax Return not yet filed. Additional penalties may apply for further delay. |
| 3 | Quarterly submission date of P46 (Car) for quarter to 5 April. |
| 31 | Last day to issue 2019/20 P60s to employees. |
| June 2020 | |
| 30 | End of CT61 quarterly period. |
| July 2020 | |
| 6 | Deadline for submission of Form 42 (transactions in shares and securities). File P11Ds, P11D(b)s and P9Ds. Issue copies of P11Ds to employees. |
| 14 | Due date for income tax for the CT61 period to 30 June 2020. |
| 19/20 | Quarter 1 2020/21 PAYE remittance due. Final date for payment of 2019/20 Class 1A NICs. |
| 31 | Second self assessment payment on account for 2019/20. |
| August 2020 | |
| 2 | Quarterly submission date of P46 (Car) for quarter to 5 July. |
| September 2020 | |
| 30 | End of CT61 quarterly period. Last day for UK businesses to reclaim EC VAT chargeable in 2017. |
| October 2020 | |
| 1 | Due date for payment of Corporation Tax for period ended 31 December 2019. |
| 5 | Individuals/trustees must notify HMRC of new sources of income/chargeability in 2019/20 if a Tax Return has not been received. |
| 14 | Due date for income tax for the CT61 quarter to 30 September 2020. |
| 19/22 | Quarter 2 2020/21 PAYE remittance due. |
| 31 | Last day to file 2020 paper Tax Return. |
| November 2020 | |
| 1 | £100 penalty if 2020 paper Tax Return not yet filed. Additional penalties may apply for further delay. |
| 2 | Quarterly submission date of P46 (Car) for quarter to 5 October. |
| December 2020 | |
| 30 | Last day for online submission of 2020 Tax Return for HMRC to collect tax through clients’ PAYE code. |
| 31 | Last day for non-EC traders to reclaim recoverable UK VAT suffered in the year to 30 June 2020. . End of CT61 quarterly period. Filing date for Corporation Tax Return Form CT600 for period ended 31 December 2019. |
| January 2021 | |
| 1 | Due date for payment of Corporation Tax for period ended 31 March 2020. |
| 14 | Due date for income tax for the CT61 quarter to 31 December 2020. |
| 18/22 | Quarter 3 2020/21 PAYE remittance due. |
| 31 | Capital gains tax payment for 2019/20. Balancing payment – 2019/20 income tax/Class 4 NICs. Last day to file the 2020 Tax Return online. |
| February 2021 | |
| 1 | £100 penalty if 2020 Tax Return not yet filed. Additional penalties may apply for further delay. Interest starts to accrue on 2019/20 tax not yet paid. |
| 2 | Quarterly submission date of P46 (Car) for quarter to 5 January. |
| March 2021 | |
| 2 | Last day to pay any balance of 2019/20 tax and Class 4 NICs to avoid an automatic 5% surcharge. |
| 31 | End of Corporation Tax financial year. End of CT61 quarterly period. Filing date for Corporation Tax Return Form CT600 for period ended 31 March 2020. |
