Tax Rates & Thresholds 2021/22

Tax bands for Income Tax for England, Wales & Northern Ireland:

 

 

Income Rate

Basic Rate

£0 - £37,700

20.00%

Higher Rate

£37,701 - £150,000

40.00%

Additional Rate

Over £150,000

45.00%

 

Personal Allowance

£12,570

 

Your first £12,570 of income will fall under the personal allowance and is tax-free. If you have an income of £50,270 then £37,700 is taxed at the basic rate and the remainder falls in the personal allowance meaning none of it falls in the higher rate.

 

Tax bands for Income Tax for Scotland:

 

 

Income Rate

Starter Rate

£0 - £2,097

19.00%

Basic Rate

£2,098 - £12,726

20.00%

Intermediate Rate

£12,727 - £31,092

21.00%

Higher Rate

£31,093 - £150,000

41.00%

Top Rate

Over £150,000

46.00%

 

Personal Allowance

£12,570

Your first £12,570 of income will fall under the personal allowance and is tax-free. If you have income of £50,270 then £2,097 will fall in the starter rate, £10,628 will fall in the basic rate, £18,365 will fall in the intermediate rate and the remaining £6,610 falls in the higher rate. The Scottish tax rates don’t apply to savings or dividend income. Savings and dividends will be taxed based on the bands and tax rates the rest of the UK uses.

 

Personal Allowance Reduction:

Your personal allowance goes down by £1 for every £2 that your income is above £100,000. This means your allowance is zero if your income is £125,140 or above.

 

Dividend tax rates:

Basic Rate

7.50%

Higher Rate

32.50%

Additional Rate

38.10%


The first £2,000 dividends are taxed at 0% (tax-free dividend allowance).

 

Self-Employment rates:

Class of NICs

Threshold

Rate

Class 2 NICs

£6,515 profit

£3.05 / week

Class 4 NICs

£9,568 profit

9% on profits between £9,568-  £50,270

2% on profits over £50,271

 

National Living Wage & Minimum Wage:

25 and over

21 to 24

18 to 20

Under 18

Apprentice

8.91

£8.36

£6.56

£4.62

£4.30

 

Entitlement to apprentice rate:

  • Aged under 19
  • Aged 19 or over and in first year of apprenticeship

Apprentices entitled to minimum wage:

  • Aged 19 or over
  • Have completed first year of apprenticeship

 

Company Taxes:

Corporation Tax Rate

19.00%

 

VAT Registration Threshold

£85,000

VAT Deregistration Threshold

£83,000

 

Flat Rate Scheme Registration Threshold

£150,000

 

If your income exceeds £230,000 in a year then you will need to deregister from the flat rate scheme.

 

Director’s Loan

Liability

Not repaid within 9 months of year-end

32.50% - S455 tax

Exceeds £10,000 at any point in year

Benefit in Kind – included on your P11D

 

Tags: tax, Expenses

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