Our Tax Rate Centre includes a summary of the most important tax rates and allowances for the tax year 2021/2022.

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 2021 / 2022 2020 / 2021
Basic Rate - income up to £37,700 £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 £37,700 £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 2021 / 2022 2020 / 2021
Personal Allowance £12,570 £12,500
Income limit for Personal Allowance £100,000 £100,000
Income limit for married couples allowance £30,400 £30,200
Maximum Married couple’s allowance for those born before 6 April 1935  £9,125 £9,075
Minimum Married couple’s allowance for those born before 6 April 1935  £3,530 £3,510
Blind persons allowance £2,520 £2,500
Transferrable Marriage Allowance £1,260 £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 2021.

Category of worker Hourly Rate
Aged 23 and above (national living wage rate £8.91
Aged 21 to 22 inclusive £8.36
Aged 18 to 20 inclusive £6.56
Under 18 (but above compulsory school leaving age) £4.62
Apprentices aged under 19 £4.30
Apprentices aged 19 and over, but in the first year of their apprenticeship £4.30
Student Loan Recovery
Rate of threshold Figures to use 2021/2022
Employee earnings threshold for Plan 1 £19,895 per year
£1,657.91 per month
£382.59 per week
Employee earnings threshold for Plan 2 £27,295 per year
£2,274.58 per month
£524.90 per week
Employee earnings threshold for Plan 4 £25,000 per year
£2,083.33 per month
£480.76 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 2021 / 2022 2020 / 2021
Weekly Lower Earnings Limit (LEL) £120 £120
Weekly Primary Threshold (PT) £184 £183
Weekly Secondary Threshold (ST) £170 £169
Upper Earnings (UEL) £967 £962
Upper Secondary Threshold for U21’s £967 £962
Apprentice Upper Secondary Threshold (AUST) for under 25s £967 £962
Employment Allowance (per employer) £4,000/year £4,000/year
Employee's (primary) Class 1 contribution rates
Below LEL N/A N/A
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 2021 / 2022 2020 / 2021
Small Profits Threshold (SPT) £6,515 £6,475
Annual profits
Below SPT £0/week £0/week
Above SPT £3.05 £3.05
Special Class 2 rate for share fishermen £3.70 £3.70
Special Class 2 rate for volunteer development workers £6.00 £6.00

 

Class 3 NICs: Other rates and thresholds per week 2021 / 2022 2020 / 2021
Voluntary contributions £15.40 £15.30

 

Class 4 NICs: Self-employed rates and thresholds per year 2021 / 2022 2020 / 2021
Lower Profits Limit (LPL) £9,568 £9,500
Upper Profits Limit (UPL) £50,270 £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) £184 £797 £9,568
Secondary Threshold (ST) £170 £737 £8,840
Upper Secondary Threshold (under 21) (UST) and Apprentice Upper Secondary Threshold (apprentice under 25) (AUST) £967 £4,189 £50,270
Upper earnings limit (UEL) £967 £4,189 £50,270
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%
Class 1 NICs: Expenses & Benefits, Termination Awards and PSAs
  2021 / 2022 2020 / 2021

Class 1A National Insurance: expenses and benefits - You must pay Class 1A National Insurance on work benefits you give to your employees, for example a company mobile phone. You report and pay Class 1A on expenses and benefits at the end of each tax year.

13.8% 13.8%

Class 1A National Insurance: termination awards and sporting testimonial payments - Class 1A National Insurance contributions are due on the amount of termination awards paid to employees which exceed £30,000 and on the amount of sporting testimonial payments paid by independent committees which exceed £100,000. You report and pay Class 1A on these types of payments during the tax year as part of your payroll.

13.8% 13.8%

Class 1B National Insurance: PAYE Settlement Agreements (PSAs) - You pay Class 1B National Insurance if you have a PSA. This allows you to make one annual payment to cover all the tax and National Insurance due on small or irregular taxable expenses or benefits for your employees.

13.8% 13.8%
Working Tax Credit - £ per year (unless stated) 2021 / 2022 2020 / 2021
Basic element £2,005 £1,995
Couple and lone parent element £2,060 £2,045
30 hour element £830 £825
Disabled worker element £3,240 £3,220
Severe disability element £1,400 £1,390

 

Childcare element of the Working Tax Credit - £ per year (unless stated) 2021 / 2022 2020 / 2021
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) 2021 / 2022 2020 / 2021
Child Tax Credit Family element £545 £545
Child element £2,845 £2,830
Disabled child element £3,435 £3,415
Severely disabled child element £4,825 £4,800

 

Child Benefit - £ per week 2021 / 2022 2020 / 2021
Eldest/Only Child £21.15 £21.05
Other Children £14.00 £13.95

 

Guardian Allowance - £ per week 2021 / 2022 2020 / 2021
Guardian’s Allowance £18.00 £17.90

 

Income thresholds and withdrawal rates - £ per year (unless stated) 2021 / 2022 2020 / 2021
First income threshold £6,565 £6,530
First withdrawal rate (per cent) 41% 41%
First threshold for those entitled to Child Tax Credit only £16,480 £16,385
Income disregard £2,500 £2,500
Income Fall Disregard £2,500 £2,500
Statutory maternity, paternity and adoption pay
Type of payment or recovery Figures to use 2021/2022
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 £151.97 or 90% of the employee's average weekly earnings, whichever is lower
Statutory Paternity Pay (SPP) - weekly rate £151.97 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 £151.97 or 90% of the employee's average weekly earnings, whichever is lower
Statutory shared parental pay (ShPP) £151.97 or 90% of the employee’s average weekly earnings, whichever is lower
Statutory Parental Bereavement Pay (SPBP) – weekly rate £151.97 or 90% of the employee’s average weekly earnings, whichever is lower
SMP/SPP/ShPP/SAP/SPBP - 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 2021/2022 Rate of payment or recovery (rounded in brackets)
Daily rate - employees with 1 qualifying day in the week £96.35 (£96.35)
Daily rate - employees with 2 qualifying days in the week £48.18 (£48.1750)
Daily rate - employees with 3 qualifying days in the week £32.12 (£32.1166)
Daily rate - employees with 4 qualifying days in the week £24.09 (£24.0875)
Daily rate - employees with 5 qualifying days in the week £19.27 (£19.2700)
Daily rate - employees with 6 qualifying days in the week £16.06 (£16.0583)
Daily rate - employees with 7 qualifying days in the week £13.77 (£13.7642)
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.

Cars first registered before 6 April 2020
CO2 (g/km) Electric Range (Miles) Appropriate %
0 N/A 1%
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 1%
1-50 >130 1%
1-50 70-129 4%
1.50 40-69 7%
1-50 30-39 11%
1-50 <30 13%
51-54   14%
55-59   15%
60-64   16%
65-69   17%
70-74   18%
75-79   19%
80-84   20%
85-89   21%
90-94   22%
95-99   23%
CO2 (g/km) Electric Range (miles) Appropriate %
100-104   24%
105-109   25%
110-114   26%
115-119   27%
120-124   28%
125-129   29%
130-134   30%
135-139   31%
140-144   32%
145-149   33%
150-154   34%
155-159   35%
160-164   36%
165-169   37%
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 2021. 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 2021/2022 is £24,600.

 

Engine size Petrol Diesel LPG
1400cc or smaller 10p N/A 7p
1401cc to 2000cc 12p N/A 8p
Bigger than 2000cc 18p N/A 12p
Less than 1600cc N/A 9p N/A
1601cc - 2000cc N/A 11p N/A
Bigger than 2000cc N/A 12p 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 £3,500 (with no reduction for older vans) plus a further £669 of taxable benefit if fuel is provided by the employer for private travel.

 

Van and fuel charge Van Fuel Total
Tax (20% taxpayer) £700 £133.80 £833.8
Tax (40% taxpayer) £1,400 £267.60 £1,667.60
Tax (45% taxpayer) £1,575.00 £301.05 £1,876.05
Employer's class 1A NICs £483.00 £92.32 £575.32
Fuel Benefit and Van Benefit charge
Income Tax Allowances 2021 / 2022 2020 / 2021
Car fuel benefit charge multiplier £24,600 £24,500
Van fuel benefit charge £669 £666
Van benefit charge £3,500 £3,490
Employee vehicles: mileage payments for business travel
Type of vehicle Rate per business mile 2021-22
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  2017

This includes cars emitting over 225g/km registered before 23 March 2006.

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.

Tax year 2020 to 2021
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

Cars with a list price of over £40,000 when new pay an additional rate of £325 per year on top of the standard rate, for 5 years.

Alternative fuelled vehicles, including hybrids, bioethanol and liquid petroleum gas, pay £140 per annum.

Tax year 2021 to 2022
CO2 emissions (g/km) Standard Rate First Year Rate
0 £0 £0
1-50 £155 £10
51-75 £155 £25
76-90 £155 £115
91-100 £155 £140
101-110 £155 £160
111-130 £155 £180
131-150 £155 £220
151-170 £155 £555
171-190 £155 £895
191-225 £155 £1,345
226-255 £155 £1,910
Over 255 £155 £2,245

Cars with a list price of over £40,000 when new pay an additional rate of £335 per year on top of the standard rate, for 5 years.

Alternative fuelled vehicles, including hybrids, bioethanol and liquid petroleum gas, pay £145per annum.

VED bands and rates for cars registered on or after March 2001

This includes cars emitting over 225g/km registered before 23 March 2006.

VED Band CO2 emissions (g/km) Tax Year 2021 to 2022 Tax Year 2020 to 2021
A Up to 100 £0 £0
B 101-110 £20 £20
C 111-120 £30 £30
D 121-130 £130 £125
E 131-140 £155 £150
F 141-150 £170 £165
G 151-165 £210 £205
H 166-175 £250 £240
I 176-185 £275 £265
J 186-200 £315 £305
K 201-225 £340 £330
L 226-255 £585 £565
M Over 255 £600 £580
2021/2022 Road Tax for cars & vans registered before 1 March 2001
Engine Size 2021 / 2022 2020 / 2021
1549cc and below £170 £165
Above 1549cc £280 £270
2021/2022 Road Tax for vans registered after 1 March 2001
Vehicle registration date 2021 / 2022 2020 / 2021
Early Euro 4 and Euro 5 compliant vans £140 £140
All other vans £275 £265
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 £137.60 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 2021 / 2022 2020 / 2021
Single person per year £7,155.20 £6,981
Spouse/civil partner addition per year £4,287.40 £4,183.40
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 £1,073,100
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 £240,000

 

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 £179.60 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 2021 to 2022 Tax year 2020 to 2021
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 £9,000
Child Trust Fund (CTF) subscription limit £9,000 £9,000
Group 2021 / 2022 2020 / 2021
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 £12,300
AEA for most trustees £6,150 £6,150
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 £1,000,000
Investors’ relief: separate lifetime limit on gains for external investors £10,000,000 £10,000,000
Level of profits From 01/04/19 From 01/04/20 From 01/04/21
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) 3% 3% 3%
Annual investment allowance (AIA) £1m £1m / £200,000 £200,000
Enhanced Capital Allowances in Freeports (ECA+) N/A / £100% (ECA+ will have effect from October 1) 100% 100%
Enhanced Structures and Buildings Allowance (SBA+) 10% 10% 10%
Full Expensing: Super-deduction N/A 130% 130%
Full Expensing: Special Rate FYA N/A 50% 50%
First year allowances (e.g. for certain energy-saving/water efficient products) N/A N/A 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%
Plant and machinery: main rate expenditure 18% 18% 18%

For the Financial year 2020 to 2021, an Annual Investment Allowance of £1m will apply to investments made from 1 January 2019 until 31 December 2020. The Annual Investment Allowance for investments before and after those dates will be £200,000.

The R&D Expenditure Credit will increase from 12% to 13% from April 2020.

The Patent Box has been phased in from April 2013, with companies being able to claim: 60% of the benefit in 2013 to 2014; 70% in 2014 to 2015; 90% in 2016 to 2017 and 100% in 2017 to 2018

For open ended investment companies and authorised unit trusts the applicable corporation tax rate is 20%.

Vat Rates April 2021/2022 April 2020/2021
Standard Rate 20% 20%
Vat Fraction 1/6 1/6
Reduced Rate 5% 5%
Zero Rate 0% 0%
Temporary reduced rate for hospitality and tourism sector 5%/12.5% 5% (with effect from 15 July 2020)

The 5% rate applies to the 30 September 2021 and the 12.5% rate applies from 1 October 2021 to 31 March 2022.

 

Taxable Turnover Limits Amounts
Registration - last 12 months or next 30 days over £85,000 from 1 April 2021
Deregistration - next 12 months under £83,000 from 1 April 2021
To join Cash accounting scheme - up to £1,350,000
To leave Cash accounting scheme - more than £1,600,000
To join Optional flat rate scheme - up to £150,000 or less
To leave Optional flat rate scheme - more than £230,000
To join Annual accounting scheme - up to £1,350,000
To leave Annual accounting scheme - more than £1,600,000
Detail 2021/2022 2020/2021
Standard threshold £325,000 £325,000
Residence nil rate band limit £175,000 £175,000
Taper threshold for residence nil-rate band £2,000,000 £2,000,000
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 -  Initial Temporary Relief Period – 1 April 2021 to 30 June 2021
Property Value Rate (on portion of value above threshold) Rate (on portion of value above threshold) if purchase is of an additional residential property Rate (on portion of value above threshold) on or after 1st April 2021 if purchase is of residential property by certain non-UK residents Rate (on portion of value above threshold) if purchase is of an additional residential property and by a certain non-UK resident
0 to £500,000 0% 3% 2% 5%
£500,000 to £925,000 5% 8% 7% 10%
£925,000 to £1.5 million 10% 13% 12% 15%
£1.5 million + 12% 15% 14% 17%
Stamp Duty Land Tax – Residential Property -  Further Temporary Relief Period – 1st July 2021 to 30th September 2021
Property Value Rate (on portion of value above threshold) Rate (on portion of value above threshold) if purchase is of an additional residential property Rate (on portion of value above threshold) on or after 1st April 2021 if purchase is of residential property by certain non-UK residents Rate (on portion of value above threshold) if purchase is of an additional residential property and by a certain non-UK resident
0 to £250,000 0% 3% 2% 5%
£250,000 to £925,000 5% 8% 7% 10%
£925,000 to £1.5 million 10% 13% 12% 15%
£1.5 million + 12% 15% 14% 17%
Stamp Duty Land Tax – Residential Property -  Standard rates from 1st October 2021 onwards
Property Value Rate (on portion of value above threshold) Rate (on portion of value above threshold) if purchase is of an additional residential property Rate (on portion of value above threshold) on or after 1st April 2021 if purchase is of residential property by certain non-UK residents Rate (on portion of value above threshold) if purchase is of an additional residential property and by a certain non-UK resident
0 to £125,000 0% 3% 2% 5%
£125,000 to £250,000 2% 5% 4% 7%
£250,000 to £925,000 5% 8% 7% 10%
£925,000 to £1.5 million 10% 13% 12% 15%
£1.5 million + 12% 15% 14% 17%

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%
Annual tax on Enveloped Dwellings

The ATED charges increase automatically each year in line with inflation (based on the previous September’s Consumer Prices Index (CPI)).

The ATED annual charges will rise by 0.5% from 1 April 2021 in line with the September 2020 Consumer Prices Index. A TIIN has not been published for this measure, as it is a routine legislative change.

The table below shows the property band and what the revised charges will be for the 2021 to 2022 chargeable period.

Property Value Charge for tax year 2021 to 2022 Charge for tax year 2020 to 2021
More than £500,000 but not more than £1 million £3,700 £3,700
More than £1 million but not more than £2 million 7,500 £7,500
More than £2 million but not more than £5 million £25,300 £25,200
More than £5 million but not more than £10 million £59,100 £58,850
More than £10 million but not more than £20 million £118,600 £118,050
More than £20 million+ £237,400 £236,250
April 2021
5 Last day of 2020/21 tax year.
Deadline for 2020/21 ISAs.
Last day to make disposals using the 2020/21 CGT exemption.
14 Due date for income tax for the CT61 period to 31 March 2021.
19/22 Quarter 4 2020/21 PAYE remittance due.
20 Interest will begin to accrue on unpaid PAYE/NI for 2020/21.
30 Normal annual adjustment for VAT partial exemption calculations (monthly returns).
May 2021
1 Start of daily penalties for 2020 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 2020/21 P60s to employees.
June 2021
30 End of CT61 quarterly period.
July 2021
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 2021.
19/20 Quarter 1 2021/22 PAYE remittance due.
Final date for payment of 2020/21 Class 1A NICs.
31 Second self assessment payment on account for 2020/21.
August 2021
2 Quarterly submission date of P46 (Car) for quarter to 5 July.
September 2021
30 End of CT61 quarterly period.
October 2021
1 Due date for payment of Corporation Tax for period ended 31 December 2020.
5 Individuals/trustees must notify HMRC of new sources of income/chargeability in 2020/21 if a Tax Return has not been received.
14 Due date for income tax for the CT61 quarter to 30 September 2021.
19/22 Quarter 2 2021/22 PAYE remittance due.
31 Last day to file 2021 paper Tax Return.
November 2021
1 £100 penalty if 2021 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 2021
30 Last day for online submission of 2021 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 2021. .
End of CT61 quarterly period.
Filing date for Corporation Tax Return Form CT600 for period ended 31 December 2020.
January 2022
1 Due date for payment of Corporation Tax for period ended 31 March 2021.
14 Due date for income tax for the CT61 quarter to 31 December 2021.
18/22 Quarter 3 2021/22 PAYE remittance due.
31 Capital gains tax payment for 2020/21.
Balancing payment - 2020/21 income tax/Class 4 NICs.
Last day to file the 2021 Tax Return online.
February 2022
1 £100 penalty if 2021 Tax Return not yet filed. Additional penalties may apply for further delay. Interest starts to accrue on 2020/21 tax not yet paid.
2 Quarterly submission date of P46 (Car) for quarter to 5 January.
March 2022
2 Last day to pay any balance of 2020/21 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 2021.

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