Tax guide 2020/21 - tax allowance, NI, inheritance, capital gains, saving

Rates	2020/21	2019/20
Personal allowance	£12,500	£12,500
Income limit	£100,000	£100,000
Transferable marriage allowance	£1,250	£1,250
Married couple’s allowance (relief at 10%)
Either partner born before 6.4.1935	£9,075	£8,915
Income limit	£30,200	£29,600
Minimum where income exceeds limit	£3,510	£3,450
Blind person’s allowance	£2,500	£2,450
Dividend allowance	£2,000	£2,000
Personal savings allowance
Basic rate taxpayers	£1,000	£1,000
Higher rate taxpayers	£500	£500

Income tax rates

Taxable income	2020/21	2019/20	Rate %	Dividend rate %
	£0 – £37,500	£0 – £37,500	20	7.5
	£37,501 – £150,000	£37,501 – £150,000	40	32.5
	Over £150,000	Over £150,000	45	38.1
Scottish taxpayers (non-savings, non-dividend income only)
Taxable income	2020/21	2019/20	Rate %
	£0 – £2,085	£0 – £2,049	19
	£2,085 – £12,658	£2,049 – £12,444	20
	£12,658 – £30,930	£12,444 – £30,930	21
	£30,930 – £150,000	£30,930 – £150,000	41
	Over £150,000	Over £150,000	46

 

 

 

 

 

 

Welsh taxpayers. For 2020/21 and 2019/20, the Welsh rates and bands are the same as for the rest of the UK (except Scotland).
A 0% starting rate for savings income only applies to the extent that such income falls within the first £5,000 of taxable income. If taxable non-savings income exceeds the limit, the starting rate does not apply. A 0% rate applies to savings income falling within the personal savings allowance. Income taxable at the starting rate for savings does not fall within the personal savings allowance.
A 0% rate applies to dividend income within the dividend allowance.
The trust rate of income tax is 45%. The dividend trust rate is 38.1%.

Class 1 (Earnings related)	2020/21
Employees
Weekly earnings
First £183	Nil
£183.01 – £962	12%
Over £962	2%
Employers
Weekly earnings
First £169	Nil
Over £169	13.8%

Employees’ rates are reduced to 5.85% for married women with valid certificates of election but the 2% rate above £962 still applies. Rates are nil for employees over state pensionable age. Normal employers’ contributions are still payable. Employers’ rates for employees under 21 and apprentices under 25 are nil on earnings up to £962 per week.
Employment allowance
(per employer) – £4,000 a year.
Available only where the employer’s NIC liability for the previous tax year was less than £100,000.
Class 1A and Class 1B – 13.8%
Class 2 (Self-employed) – Flat rate £3.05 a week.
Small profits threshold £6,475 a year.
Class 3 (Voluntary contributions) – £15.30 a week.
Class 4 (Self-employed) – 9% of profits between £9,500
and £50,000 a year. 2% of profits above £50,000 a year.

	2020/21	2019/20
Nil-rate band	£325,000	£325,000
Residence nil-rate band	£175,000	£150,000
Rate of tax on excess	40%	40%
Chargeable lifetime transfers	20%	20%
Annual gifts of up to £3,000 per donor are exempt.

Annual exempt amounts  2020/21	Rates
Individuals, disabled trusts, personal representatives
for year of death and two years thereafter	£12,300
Trusts generally	£6,150
Rates 2020/21
Individuals: Standard rate	10%
Higher rate	20%
Trustees and personal representatives	20%
Gains on residential property and carried interest	18% / 28%
Gains to which entrepreneurs’ relief applies	10%
Gains to which investors’ relief applies	10%

Limits	2020/21	2019/20
Annual limit	£20,000	£20,000
Junior ISA annual limit	£9,000	£4,368
Lifetime ISA annual limit	£4,000	£4,000
Help to Buy ISA monthly limit	£200	£200

Tax-Free Mileage Allowances

Employee’s own vehicle
Motorcars and vans	2020/21
Up to 10,000 business miles	45p
Over 10,000 business miles	25p
Each passenger making same trip	5p
Motorcycles	24p
Cycles	20p

Advisory fuel rates for company car from 1 March 2020
Cylinder capacity	Petrol	Diesel	LPG
0-1,400 cc	12p	–	8p
0-1,600 cc	–	9p	–
1,401 cc – 2,000 cc	14p	–	10p
1,601 cc – 2,000 cc	–	11p	–
Over 2,000 cc	20p	13p	14p