The current tax rates, Allowances and figures 2021/22
We have complied a list of key individual and business tax rates and allowances currently set by the Government and will aim to keep this up to date. There are some new taxes and tax amendments listed below that reflect the focus on carbon neutral goals.
If you need any further clarification then you can call one of our consultants for free advice on 01923 901555.
Corporate Tax rates
The financial year runs from 1st April to 31st March.
2021/22 | 2022/23 | 2023/24 | |
---|---|---|---|
Main rate | 19% | 19% | 25% |
Small profit rates | N/A | N/A | 19% |
Lower threshold | N/A | N/A | £50,000 |
Upper threshold | N/A | N/A | £250,000 |
Corporation Tax on chargeable gains
If you sell or dispose of a business asset, you’ll need to pay Corporation Tax on any profits (or ‘chargeable gains’).
Capital Allowances
You can claim capital allowances when you buy assets you will be using in your business (known as plant and machinery): computers, cars, furniture, equipment, fixtures, machines and other equipment used for business purposes.
If you’re a sole trader or partner and have an income of £150,000 or less a year, you may be able to use a simpler system called cash basis instead.
Main rate (all profits except ring fence profits) | Special rate for unit trusts and open-ended investment companies |
---|---|
19% | 20% |
Business Cars
You can claim capital allowances on cars you buy and use in your business. This means you can deduct part of the value from your profits before you pay tax.
Cars do not qualify for annual investment allowance (AIA).
The Capital Allowances Act 2001 amendment
The first-year allowance for cars with low carbon dioxide emissions has been extended a further four years to 31st March 2025.
Capital Gains Tax
Capital Gains Tax is a tax on the profit when you sell (or ‘dispose of’) something (an ‘asset’) that’s increased in value and the tax is based on the profit you make.
Use these rates and allowances for Capital Gains Tax to work out your overall gains above your tax-free allowance (known as the Annual Exempt Amount).
You’ll get an annual tax-free allowance, known as the Annual Exempt Amount (AEA), if you’re liable to Capital Gains Tax every tax year unless you’re non-domiciled in the UK and have claimed the remittance basis of taxation on your foreign income and gains.
You only pay Capital Gains Tax if your overall gains for the tax year (after deducting any losses and applying any reliefs) are above the AEA.
Individuals | Individuals | Trust |
---|---|---|
Exemption | £12,300 | £6,150 |
Standard rate | 10% | 20% |
Higher rate | 20% |
- 10% and 20% tax rates for individuals (not including residential property and carried interest)
- 18% and 28% tax rates for individuals for residential property and carried interest
- 20% for trustees or for personal representatives of someone who has died (not including residential property)
- 28% for trustees or for personal representatives of someone who has died for disposals of residential property
- 10% for gains qualifying for Entrepreneurs’ Relief
- 28% for Capital Gains Tax on property where the Annual Tax on Enveloped Dwellings is paid, AEA is not applicable
- 20% for companies (non-resident Capital Gains Tax on the disposal of a UK residential property)
If you pay higher rate Income Tax
If you’re a higher or additional rate taxpayer you’ll pay:
- 28% on your gains from residential property
- 20% on your gains from other chargeable assets
VAT rates on different goods and services
Registered businesses charge VAT on goods and services sold and pay VAT on goods and services purchases. There are 3 different rates; standard, reduced and zero VAT depending on the business, see exemptions list.
Rate Conditions
These rates may only apply if certain conditions are met, or in particular circumstances, depending on some or all of the following:
- who’s providing or buying them
- where they’re provided
- how they’re presented for sale
- the precise nature of the goods or services
- whether you obtain the necessary evidence
- whether you keep the right records
- whether they’re provided with other goods and services
These rates may only apply if certain conditions are met, or in particular circumstances, depending on some or all of the following:
Standard rate VAT 2021/22 currently 20%
Exemption rate VAT 2021/22 currently 5% (see exemption list)
The thresholds for registering for VAT or joining a VAT accounting scheme from 1 January 2021.
Circumstance | Threshold |
---|---|
VAT registration | More than £85,000 |
Registration for distance selling into Northern Ireland | More than £70,000 |
Registration for bringing goods into Northern Ireland from the EU | More than £85,000 |
Deregistration threshold | Less than £83,000 |
Completing simplified EC Sales List | £106,500 or less and supplies to EU countries of £11,000 or less |
Income Tax bands of taxable income (£ per year)
The current tax year is from 6 April 2021 to 5 April 2022.
Band | Taxable income | Rate |
---|---|---|
Personal allowance | up to £12, 570 | 0% |
Basic rate | £12,571 to £50,270 | 20% |
Higher rate | £50,271 to £150,000 | 40% |
Additional rate | Column 2over £150,000 Value 4 | 45% |
You do not get a Personal Allowance on taxable income over £125,140.
The Personal Allowance goes down by £1 for every £2 of income above the £100,000 limit. It can go down to zero.
Blind person allowance: Minimum £3,350 – Maximum £9,125
Marriage allowance: £1,260
Married couple allowance: minimum £3,510 maximum £9,125
Dividend allowance: £2,000
Income Tax bands of taxable income (£ per year)
Tax year 2021/22 | Tax year 2022/23 | Tax year 2023/24 | Tax year 2024/25 | Tax year 2025 /26 | |
---|---|---|---|---|---|
Basic rate | £1 to £37,700 | £1 to £37,700 | £1 to £37,700 | £1 to £37,700 | £1 to £37,700 |
Higher rate | £37,701 to £150,000 | £37,701 to £150,000 | £37,701 to £150,000 | £37,701 to £150,000 | £37,701 to £150,000 |
Additional rate | Over £150,000 | Over £150,000 | Over £150,000 | Over £150,000 | Over £150,000 |
National Insurance
Employee and employer Class 1 contributions rates and thresholds (£ per week)
Tax year 2020 to 2021 | Tax year 2021 to 2022 | |
---|---|---|
Weekly Lower Earnings Limit (LEL) | £120 | £120 |
Weekly Primary Threshold (PT) | £183 | £184 |
Weekly Secondary Threshold (ST) | £169 | £170 |
Upper Earnings Limit (UEL) | £962 | £967 |
Upper Secondary Threshold for under 21s | £962 | £967 |
Apprentice Upper Secondary Threshold (AUST) for under 25s | £962 | £967 |
Employment Allowance (per employer) | £4,000 per year | £4,000 per year |
Employee’s (primary) Class 1 contribution rates
Earnings band | Tax year 2020 to 2021 | Tax year 2021 to 2022 (unchanged) |
---|---|---|
Below Weekly Lower Earnings Limit (LEL) | N/A | N/A |
Weekly Lower Earnings Limit (LEL) to Weekly Primary Threshold (PT) | 0% | 0% |
Weekly Primary Threshold (PT) to Upper Earnings Limit (UEL) | 12% | 12% |
Above Upper Earnings Limit (UEL) | 2% | 2% |
Employer’s (secondary) Class 1 contribution rates
Lower Earnings Limit | Primary Threshold (PT) | Secondary Threshold (ST) | Upper Earnings Limit (UEL) |
---|---|---|---|
£120 | £184 | £170 | £967 |
Self-employed Class 2 contribution rates and thresholds (£ per week)
Tax year 2020/21 | Tax year 2021/22 | |
---|---|---|
Small Profits Threshold (SPT) | £6,475 | £6,515 |
The Personal Allowance goes down by £1 for every £2 of income above the £100,000 limit. It can go down to zero.
Class 3 National Insurance (voluntary)
You can pay voluntary National Insurance to fill or avoid gaps in your record.
If you’re paying voluntary contributions for the previous 2 tax years (2020 to 2021 or 2019 to 2020), you’ll pay the original rates for those years.
For all other years you’ll pay the current rate (2021 to 2022).
Class 3 rate is £15.40 per week.
Class 4
Tax year 2020/21 | Tax year 2021/22 | |
---|---|---|
Annual profits band | NIC rate (per cent) | NIC rate (per cent) (unchanged) |
Below Lower Profits Limit (LPL) | 0% | 0% |
Lower Profits Limit (LPL) to Upper Profits Limit (UPL) | 9% | 9% |
Above Upper Profits Limit (UPL) | 2% | 2% |
Inheritance Tax
Threshold for Inheritance tax
- Value of your estate is below £325,000
- you leave everything above the £325,000 threshold to your spouse, civil partner, a charity or a community amateur sports club
If you give away your home to your children (including adopted, foster or stepchildren) or grandchildren your threshold can increase to £500,000. If you’re married or in a civil partnership and your estate is worth less than your threshold, any unused threshold can be added to your partner’s threshold when you die. This means their threshold can be as much as £1 million.
Stamp Duty
Current threshold
You must pay Stamp Duty Land Tax (SDLT) if you buy a property or land over a certain price in England and Northern Ireland.
The current SDLT threshold for residential properties is £500,000 and non residential is £150,000. This changes on 1 July 2021.
Property purchases from 1 October 2021
The SDLT thresholds will be:
- £125,000 for residential properties
- £150,000 for non-residential land and properties
Tax credits, Child Benefit and Guardians Allowance
Plastic Packaging Tax
Rate from 1 April 2022
£200 per tonne for plastic packaging with less than 30% recycled plastic content.
There will be a de minimis threshold of 10 tonnes of plastic packaging per 12 months, though for the first year this will be calculated differently.
Landfill Tax rates for 2021 to 2022
Material sent to landfill | Rate from 1 April 2020 | Rate from 1 April 2021 | Rate from 1 April 2022 |
---|---|---|---|
Coverage | England and Northern Ireland | England and Northern Ireland | England and Northern Ireland |
Standard-rated (per tonne) | £94.15 | £96.70 | £98.60 |
Lower rated (per tonne) | £3.00 | £3.10 | £3.15 |