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UK Tax & Allowances

7 min read 6 Apr 22

Tax/Allowance

2020/21

2021/22

2022/23

Further Information

Basic rate income tax band (20%)

£0 - £37,500

£0 - £37,700

£0 - £37,700

Read more about income tax                      

Higher rate income tax band (40%)

£37,501 - £150,000

£37,701 - £150,000

£37,701 - £150,000

Additional rate income tax band (45%)

£150,000+

£150,000+

£150,000+

Tax/Allowance

2020/21

2021/22

2022/23

Further Information

Starter rate income tax (19%)

£0 - £2,085

£0 - £2,097

£0 - £2,162

Read more about Scottish tax rates

Basic rate income tax (20%)

£2,086 - £12,658

£2,098 - £12,726

£2,163 - £13,118

Intermediate rate income tax (21%)

£12,659 - £30,930

£12,727 - £31,092

£13,119 – £31,092

Higher rate income tax (40%)

n/a

n/a

n/a

Higher rate income tax (41%)

£30,931 - £150,000

£31,093 - £150,000

£31,093 - £150,000

Additional rate income tax band (45%)

n/a

n/a

n/a

Top rate income tax band (46%)

£150,000 +

£150,000+

£150,000+

Tax/Allowance

2020/21

2021/22

2022/23

Further Information 

Starting rate of tax on savings income

0%

0%

0%

Read more about income tax

Basic rate of tax on savings income

20%

20%

20%

Higher rate of tax on savings income

40%

40%

40%

Additional rate of tax on savings income

45%

45%

45%

Tax/Allowance

2020/21

2021/22

2022/23

Further Information

Basis rate tax payers

£1,000

£1,000

£1,000

Read more about Personal  Savings Allowance

Higher rate tax payers

£500

£500

£500

Additional rate tax payers

£0

£0

£0

Tax/Allowance

2020/21

2021/22

2022/23

Further Information

Personal allowance

£12,500

£12,570

£12,570

Read more on personal allowances

Blind persons allowance

£2,500

£2,520

£2,600

Tax/Allowance

2020/21

2021/22

2022/23

Further Information

Dividend allowance

£2,000

£2,000

£2,000

Read more about tax on dividends

Dividend ordinary rate - for dividends otherwise taxable at the basic rate.

7.5%

7.5%

8.75%

Dividend upper rate - for dividends otherwise taxable at the higher rate.

32.5%

32.5%

33.75%

Dividend additional rate - for dividends otherwise taxable at the additional rate.

38.1%

38.1%

39.35%

Tax/Allowance

2020/21

2021/22

2022/23


Further Information

Discretionary trusts 

Read more about special rates of income tax                             

UK investment bonds

Gains above 1,000 taxed at 25%

Gains above 1,000 taxed at 25%

Gains above 1,000 taxed at 25%

Offshore investment bonds

Gains above £1,000 taxed at 45%

Gains above £1,000 taxed at 45%

Gains above £1,000 taxed at 45%

Unit trusts & OEICs

Dividends taxed at 7.5% and interest taxed at 20%. For income above £1,000, dividends are taxed at 38.1% and interest 45%

Dividends taxed at 7.5% and interest taxed at 20%. For income above £1,000, dividends are taxed at 38.1% and interest 45%

Dividends taxed at 8.75% and interest taxed at 20%. For income above £1,000, dividends are taxed at 39.35% and interest 45%

Interest in Possession Trusts

UK investment bonds

In tax years post death, UK trustees are taxed at 25%

In tax years post death, UK trustees are taxed at 25%

In tax years post death, UK trustees are taxed at 25%

Offshore investment bonds

In tax years post death, UK trustees are taxed at 45%

In tax years post death, UK trustees are taxed at 45%

In tax years post death, UK trustees are taxed at 45%

Unit trusts and OEICs

Trustees are taxed at 20% on interest and 7.5% on dividends

Trustees are taxed at 20% on interest and 7.5% on dividends

Trustees are taxed at 20% on interest and 8.75% on dividends

Tax/Allowance

2020/21

2021/22

2022/23

Further Information

Marriage Allowance

£1,250

£1,260

£1,260

Read more about Marriage Allowance

Marriage Couple's Allowance for those born before 6 April 1935

£9,075(max)
£3,510(min)

£9,125 (max)
£3,53
0 (min)

£9,415 (max)
£3,640 (min)

Income limit for Married Couple's Allowance

£30,200

£30,400

£31,400

Tax/Allowance

2020/21

2021/22

2022/23

Further Information  

Class 1 NICs: Employee and employer thresholds and allowance
(£ per week - except where stated) 
 

Read more about National Insurance   

Lower Earnings Limit

£120

£120

£123

Primary Threshold

£183

£184

£229*

Secondary Threshold

£169

£170

£175

Upper Earnings Limit

£962

£967

£967

Upper Secondary Threshold for under 21s

£962

£967

£967

Apprentice Upper Secondary Threshold for under 25s

£962

£967

£967

Employment Allowance (per employer)

£4,000 per year

£4,000 per year

£5,000 per year

*Employee National Insurance is using the “Effective Annual threshold” of £11,908 which refers to the Primary Threshold level if the weekly level was applied for a full year. This is based on the Primary Threshold being £9,880 from 6 April 2022 until 5 July 2022, and then £12,570 from 6 July 2022 until 5 April 2023

Class 1 NICs: Employee NIC rates
(£ per week - except where stated) 

Below Weekly Lower Earnings Limit

0%

0%

0%

Weekly Lower Earnings Limit to Primary Threshold

0%

0%

0%

Primary Threshold to Upper Earnings Limit

12%

12%

13.25%

Above Upper Earnings Limit

2%

2%

3.25%

Married woman’s reduced rate for (primary) Class 1 contribution rates

 

Weekly earnings from between the Primary Threshold and Upper Earnings Limit

5.85%

5.85%

7.1%

Weekly earnings above the Upper Earnings Limit

2%

2%

3.25%

Class 1 NICs: Employer NIC rates
(£ per week - except where stated) 

 

Employer’s (secondary) Class 1 contribution rates 

 

Below the Secondary Threshold

0%

0%

0%

Above the Secondary Threshold

13.8%

13.8%

15.05%

Employer’s (secondary) Class 1 contribution rates for employees under 21 

 

Below the Upper Secondary Threshold

0%

0%

0%

Above Upper Secondary Threshold

13.8%

13.8%

15.05%

Employer’s (secondary) Class 1 contribution rates for Apprentices under 25 

 

Below the Upper Secondary Threshold

0%

0%

0%

Above Upper Secondary Threshold

13.8%

13.8%

15.05%

Class 2 NICs: Self-employed rates and thresholds
(£ per week - except where stated)

 

Small Profits Threshold

£6,475 per year

£6,515 per year

£6,725 per year

Above the Small Profits Threshold

£3.05

£3.05

£3.15

Class 3 NICs: Other rates and thresholds
(£ per week) 

 

Voluntary contributions

£15.30

£15.40

£15.85

Class 4 NICs: Self-employed rates and thresholds
(£ per year) 

 

Lower Profits Limit

£9,500

£9,568

£9,880

Upper Profits Limit

£50,000

£50,270

£50,270

Class 4 contribution rates

 

Below the Lower Profits Limit

0%

0%

0%

Between the Lower Profits Limit  and Upper Profits Limit

9%

9%

10.25%

Above the Upper Profits Limit

2%

2%

3.25%

Tax/Allowance

2020/21

2021/22

2022/23

Further Information

Working tax credits (per year)  

Read more about child benefit and guardians allowance

Basic element

£1,995

£2,005

Announced Nov 2021

Couple and lone parent element

£2,045

£2,060

Announced Nov 2021

30 hour element

£825

£830

Announced Nov 2021

Disabled worker element

£3,220

£3,240

Announced Nov 2021

Severe disability element

£1,390

£1,400

Announced Nov 2021

Childcare element of the working tax credit (per week)

 

Maximum eligible cost for one child

£175

£175

Announced Nov 2021

Maximum eligible cost for two or more children

£300

£300

Announced Nov 2021

Percentage of eligible costs covered

70%

70%

Announced Nov 2021

Child tax credit (per year)

 

Family element

£545

£545

Announced Nov 2021

Child element

£2,830

£2,845

Announced Nov 2021

Disabled child element

£3,415

£3,435

Announced Nov 2021

Severely disabled child element

£4,800

£4,825

Announced Nov 2021

Child benefit (per week)

 

Eldest/only child

£21.05

£21.15

Announced Nov 2021

Other children

£13.95

£14.00

Announced Nov 2021

Guardian's allowance

£17.90

£18.00

Announced Nov 2021

Tax/Allowance

2020/21

2021/22

2022/23

Further Information

Pensions allowances

Lifetime Allowance limit

£1,073,100

£1,073,100

£1,073,100

Read more about pensions allowances

Annual Allowance limit

£40,000

£40,000

£40,000

Tapered Annual Allowance

From £4,000 to £40,000

From £4,000 to £40,000

From £4,000 to £40,000

Money Purchase Annual Allowance

£4,000

£4,000

£4,000

 Tax free savings accounts 

Individual Savings Account (ISA) subscription limit

£20,000*

*Of which £4,000 may be saved into a Lifetime ISA

£20,000*

*Of which £4,000 may be saved into a Lifetime ISA

£20,000*

*Of which £4,000 may be saved into a Lifetime ISA

Read more about Tax free savings accounts

Junior ISA subscription limit

£9,000

£9,000

£9,000

Child Trust Fund (CTF) subscription limit

£9,000

£9,000

£9,000

Insurance Premium Tax

Standard rate

12%

12%

12%

Higher rate

20%

20%

20%

Capital Gains Tax

Main rates for individuals

10% / 20%

10% / 20%

10% / 20%

Read more about Capital Gains Tax

Rates for individuals (for gains on residential property not eligible for Private Residence Relief, and carried interest)

18% / 28%

18% / 28%

18% / 28%

Main rate for trustees and personal representatives

20%

20%

20%

Rate for trustees and personal representatives (for gains on residential property not eligible for Private Residence Relief)

28%

28%

28%

Annual Exempt Amount (AEA) for individuals and personal representatives

£12,300

£12,300

£12,300

AEA for most trustees

£6,150

£6,150

£6,150

Rate on gains subject to entrepreneurs’ relief

10%

10%

10%

Rate on gains subject to investors’ relief

10%

10%

10%

Business Asset Disposal Relief (formerly Entrepreneurs’ relief): lifetime limit on gains for entrepreneurs

£10,000,000

£1,000,000

£1,000,000

Investors’ relief: lifetime limit on gains for external investors

£10,000,000

£10,000,000

£10,000,000

 Inheritance tax

Rate (for estates)

40%

40%

40%

Read more about Inheritance tax

Reduced rate (for estates leaving 10% or more to charity)

36%

36%

36%

Rate (for chargeable lifetime transfers)

20%

20%

20%

Nil rate band limit

£325,000

£325,000

£325,000

Residence nil rate band limit

£175,000

£175,000

£175,000

Taper threshold for residence nil-rate band

£2,000,000

£2,000,000

£2,000,000

Stamp Duty Land Tax - residential property

Standard Rate (on portion of value above threshold)

Read more about Stamp Duty Land Tax

£0 to £125,000

0%

0%

0%

£125,000 to £250,000

2%

2%

2%

£250,000 to £925,000

5%

5%

5%

£925,000 to £1,500,000

10%

10%

10%

£1,500,000 +

12%

12%

12%

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

3%

3%

3%

£125,000 to £250,000

5%

5%

5%

£250,000 to £925,000

8%

8%

8%

£925,000 to £1,500,000

13%

13%

13%

£1,500,000 +

15%

15%

15%

Rates for first-time buyers purchasing properties worth £500,000 or less

£0 to £300,000

0%

0%

0%

0%

 

£300, to £500,000

5%

5%

5%

5%

 

£500,000 +

Standard rates

Standard rates

Standard rates

Standard rates

 

Stamp Duty Land Tax - non-residential property

0 to £150,000

0%

0%

0%

Read more about Stamp Duty Land Tax

£150,000 to £250,000

2%

2%

2%

£250,000 +

5%

5%

5%

Tax/Allowance

2020/21

2021/22

2022/23

Further Information

Corporation tax rates

 

Read more about tax on businesses

Main rate

19%

19%

19%

Value Added Tax

 

Standard rate

20%

20%

20%

Reduced rate

5%

5%

5%

Zero rate items

0%

0%

0%

VAT registration threshold

£85,000

£85,000

£85,000

VAT deregistration threshold

£83,000

£83,000

£83,000

Tax/Allowance

2020/21

2021/22

2022/23

Further Information

Full new flat rate State Pension(per week)

£175.20

£179.60

£185.15

Read more about the new State Pension

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