Tax facts based on Budget announcements on 3 March 2021.
For more information on tax rates and other tax facts, please click on the links below or download the tax facts PDF.
- Income tax rates
- Income tax allowances
- Pension contributions
- Capital gains tax
- Inheritance tax
- Non domiciled remittance basis users
- National insurance contributions
- Individual savings accounts
- Tax efficient savings and investments
- Property stamp taxes
- Annual tax on enveloped dwellings
- Corporation tax and diverted profits tax
- Patent box
- Research and development tax relief
- Capital allowances
- Value added tax
- Digital services tax
- Stamp duty
- Authorised mileage rates
- Car and fuel scale benefits
A Rate on non dividend savings income up to £5,000 is 0% where taxable non savings income does not exceed £5,000.
B A dividend allowance effectively taxes the first £2,000 dividends received at 0%. Dividends above this limit are taxed at 7.5% for basic and standard rate taxpayers, 32.5% for higher rate taxpayers and 38.1% for additional and trust rate taxpayers.
C Basic rate band increased by gross Gift Aid donations and most personal pension contributions.
D Scottish income tax and rate bands apply to earned, pensions and property income of Scottish taxpayers. UK income tax rates and bands apply for other income, including savings and dividend income of Scottish taxpayers. The Welsh Government also has the right to set the Welsh rate of income tax that applies to earned, pension and property income of Welsh taxpayers in addition to the UK rates after reducing those rates by 10%. The Welsh Government has set the Welsh rate of income tax at 10% for both 2020/21 and 2021/22, leaving the combined UK plus Welsh rates the same as those applying in England and Northern Ireland.
A Reduced by £1 for every £2 of income over £100,000.
B Non residents may not be entitled to personal allowances, in certain circumstances.
C Available to persons born before 6 April 1935. Relief limited to 10%. Reduced to minimum allowance by £1 for every £2 over income limit. Minimum allowance reduced by £1 for every £2 income over £100,000 after applying personal allowance reduction.
D £500 for higher rate and £nil for additional rate taxpayers.
E If gross income in excess of £1,000, a deduction of £1,000 instead of actual expenses is permitted.
Note: High income child benefit charge: 1% of the benefit per £100 of adjusted net income over £50,000: 100% of the benefit when adjusted net income is over £60,000.
A Up to the lower of 100% of earnings or the maximum contribution. Maximum contribution is the annual allowance plus unutilised allowances from the three previous tax years. Up to £3,600 may be contributed irrespective of earnings. Annual allowance reduced by £1 for every £2 income over £240,000 to a minimum of £4,000, and to £4,000 maximum if certain pension drawings made.
A Gains on carried interest and chargeable residential property - 8% surcharge.
Note: Non UK residents are subject to capital gains tax (or corporation tax for companies) on sale of UK property and certain disposals of interests in UK property rich entities.
Note: Certain disposals of UK land and buildings by non residents and disposals of residential property by UK residents must be reported and the tax paid to HMRC within 30 days of sale.
A Additional residence nil rate band (RNRB) of £175,000 for transfers of a main residence to direct descendants. NRB and RNRB for estate of surviving spouse are increased by unutilised percentage of NRB and RNRB of predeceased spouse. RNRB tapers away for estates over £2m.
B Some lifetime gifts are taxed at 20%.
C Tax rate reduced to 36% where 10% or more of net chargeable estate is left to charity.
Note: Certain returning former UK domiciled individuals, and non domiciled individuals who have been resident in the UK in at least 15 of the previous 20 tax years, are treated as if UK domiciled for income tax, capital gains tax and inheritance tax purposes.
The first £4,000 of employer's liability relieved by the employment allowance for employers with an NIC bill of less than £100,000.
No employers NIC for employees aged under 21 (and apprentices up to age 25) on earnings up to £967 per week (the upper earnings limit).
Apprenticeship Levy at 0.5% payable on annual pay bills in excess of £3m, net of £15,000 annual allowance.
|INDIVIDUAL SAVINGS ACCOUNTS|
|Maximum annual investment||2021/22||2020/21|
|Cash and shares combined limit||£20,000||£20,000|
Note: Help To Buy ISA - scheme closed to new accounts from 30 November 2019. Deposits of up to £200 per month eligible for existing accounts.
Note: The lifetime ISA allowance counts towards the maximum cash and shares combined ISA limit.
A Income tax relief at 50%.
B Income tax relief at 30%.
C Up to £2m for 'knowledge-intensive' companies.
D Capital gains tax deferral on gains reinvested in EIS qualifying investments.
E Capital gains tax exemption on 50% of gains reinvested in SEIS qualifying investments.
As a response to the Coronavirus crisis, the nil rate of SDLT in England and Northern Ireland is extended to £500,000 until 30 June 2021, falling to £250,000 until 30 September 2021. The nil rate band of LBTT is extended to £250,000 until 31 March 2021 (subject to certain conditions). The nil rate band of LTT is extended to £250,000 until 30 June 2021 (subject to certain conditions).
3% supplement (4% for LBTT and LTT) to above rates for second properties and all purchases above £40,000 by corporates, discretionary and certain other trustees.
Residential properties in England and Northern Ireland purchased by non natural persons (enveloped properties) for more than £500,000 incur a flat 15% SDLT rate unless a relief is available.
First time buyer exemption from SDLT for purchases up to £300,000 and for the first £300,000 of purchases up to £500,000. First time buyer relief from LBTT for the first £175,000 of relevant property purchases.
From 1 April 2021, a 2% SDLT surcharge applies on residential property acquired by non UK residents.
Qualifying purchases in freeport tax sites will be eligible for full relief from SDLT.
England and Northern Ireland - 1% on present value of rents above £125,000,
|Non residential/mixed use||England & NI||Scotland||Wales|
|£0 - £150,000||Nil||Nil||Nil|
|£150,001 - £225,000||2%||1%||Nil|
|£225,001 - £250,000||2%||1%||1%|
|£250,001 - £1m||5%||5%||5%|
Non residential/mixed leases
England and Northern Ireland - 1% on present value of rents £150,001 to £5m, 2% above £5m.
Scotland - 1% on present value of rents £150,001 to £2m, 2% above £2m.
Wales - 1% on present value of rents £225,001 to £2m, 2% above £2m.
|ANNUAL TAX ON ENVELOPED DWELLINGS|
|Residential property value||2021/22||2020/21|
|£500,001 - £1m||£3,700||£3,700|
|£1m - £2m||£7,500||£7,500|
|£2m - £5m||£25,300||£25,200|
|£5m - £10m||£59,100||£58,850|
|£10m - £20m||£118,600||£118,050|
|CORPORATION TAX AND DIVERTED PROFITS TAX|
|Loans to participators||32.5%||32.5%|
|Restitution interest payments
corporation tax rate
|Diverted profits tax||25%||25%||C, D|
A To increase to 25% from 1 April 2023, with small companies rate of 19% where profits do not exceed £50,000.
B Withheld at source.
C Applies to profits of large entities diverted from the UK as a result of an avoided permanent establishment or transactions which lack economic substance.
D To increase to 31% from 1 April 2023.
|Effective rate of tax on qualifying profits||10%||A|
A Nexus based regime operates from 1 July 2016. Previous regime available until 2021 if opt in election made for patents registered by 30 June 2016.
|RESEARCH AND DEVELOPMENT TAX RELIEF|
|SME enhanced deduction scheme||130%||A|
|SME cash credit for R&D loss surrendered||14.5%||B|
|Large company R&D expenditure credit||13%||C|
A Additional (enhanced) tax deduction available for qualifying R&D expenditure.
B From 1 April 2021, the payable R&D tax credit in any tax year in excess of £20,000 is restricted to three times the total relevant PAYE income tax and NIC liability for the year.
C Taxable credit available on qualifying R&D expenditure.
A Provides allowances of 130% on most new plant and machinery investments by companies that ordinarily qualify for 18% main rate writing down allowances.
B Allowance of 50% on most new plant and machinery investments by companies that ordinarily qualify for 6% special rate writing down allowances.
C Maximum annual investment allowance £1m pa from 1 January 2019 to 31 December 2021 (£200,000 pa to 31 December 2018 and from 1 January 2022).
D Reducing balance.
E Available for: research and development (no time limit); enterprise zone (assisted areas) until designated dates between 31 March 2021 and 16 March 2024; brand new low emission cars and gas refuelling stations until 31 March 2025; zero-emission goods vehicles until 31 March 2025/5 April 2025; and electric vehicle charge points until 31 March 2023/5 April 2023 (previously applied for energy saving and environmentally beneficial (water efficient) technologies until 31 March 2020/5 April 2020).
F Available on qualifying assets brought into use on or before 30 September 2026, and after the date the relevant freeport tax site is designated.
G Expenditure on non residential structures and buildings on construction contracts entered into on or after 29 October 2018.
H Where a structure or building is in a freeport, the rate of relief increases to 10 per cent for contracts entered into on or after the date the freeport is designated as such.
A Temporary reduced rate for hospitality and tourism sector - 5% from 15 July 2020 to 30 September 2021 and interim rate of 12.5% from 1 October 2021 to 31 March 2022, returning to standard rate from 1 April 2022.
B Taxable turnover is measured by reference to the last 12 months or next 30 days.
C From 1 January 2021, EC sales lists are no longer required for goods exported from Great Britain and services supplied to EU businesses but are still required for goods supplied from Northern Ireland to EU VAT registered customers. Simplified annual EC sales lists can be used where: annual taxable turnover does not exceed £110,500; goods supplied annually from Northern Ireland to EU VAT registered customers do not exceed £11,000; and, sales do not include new means of transport.
D From 1 January 2021, Intrastat declarations are no longer required for goods exported from Great Britain to the EU, but are still required for goods imported from the EU into Great Britain until 31 December 2021 and for goods moving between Northern Ireland and the EU.
|Consideration on shares over £1,000||0.5%|
|AUTHORISED MILEAGE RATES|
|Private cars and vans||First 10,000 miles in the tax year||45p|
|Each qualifying passenger||5p|
Note: The authorised mileage rates for private cars and vans above are for income tax purposes only. The authorised rate for National Insurance purposes is 45p per mile regardless of annual mileage.
Note: Diesel vehicles meeting the RDE2 standard are exempt from diesel supplement and the above petrol rates apply for such vehicles.