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2020/21 tax tables - in an easy to read format

We've compiled the definitive set of tax tables for 2020/21, taking the latest budget information into account, in a complete listing of tax changes, rates and thresholds. We hope you find it useful. Please do contact us if we can help with payroll, pensions or accounting issues.

Personal Allowance	£12,500.00
Default Tax Code	1250L
Weekly SMP/SPP/SAP	£151.20
Weekly SSP	£95.85

UK PAYE Tax Brackets

Above threshold and up to £37,500.00	20%
From £37,501.00 to £150,000.00	40%
Above £150,000.00	45%

Class 1 National Insurance Thresholds

Class 1 National Insurance Contributions (NICs) are paid by employees earning more than the lower earnings limit and under State Pension age - they’re automatically deducted by your employer

	Weekly	Monthly	Annually
Lower Earnings Limit (LEL)	£120.00	£520.00	£6,240.00
Primary Threshold (PT)	£183.00	£792.00	£9,500.00
Secondary Threshold (ST)	£169.00	£732.00	£8,788.00
Upper Secondary Threshold (under 21) (UST)	£962.00	£4,167.00	£50,000.00
Apprentice Upper Secondary Threshold (apprentice under 25) (AUST)	£962.00	£4,167.00	£50,000.00
Upper Earnings Limit (UEL)	£962.00	£4,167.00	£50,000.00

Class 1 National Insurance Rates

Letter	Earnings at or above LEL up to and including PT		Earnings above the PT up to and including UEL		Balance of earnings above UEL
	Employee	Employer	Employee	Employer	Employee	Employer
A	0.0%	0.0%	12.0%	13.8%	2.0%	13.8%
B	0.0%	0.0%	5.85%	13.8%	2.0%	13.8%
C	0.0%	0.0%	0.0%	13.8%	0.0%	13.8%
H	0.0%	0.0%	12.0%	0.0%	2.0%	13.8%
J	0.0%	0.0%	2.0%	13.8%	2.0%	13.8%
M	0.0%	0.0%	12.0%	0.0%	2.0%	13.8%
X	0.0%	0.0%	0.0%	0.0%	0.0%	0.0%
Z	0.0%	0.0%	2.0%	0.0%	2.0%	13.8%

Self-employed National Insurance contributions

Class 2 NICs are paid by self-employed people earning above the threshold

Small profits threshold – Earnings below this threshold incur no NICs.	£6,475
Class 2 NICs – for those earning above the Small profits threshold	£3.05 per week
Lower Profits Limit – Earnings up to this limit incur only Class 2 NICs. Over this limit incurs Class 4 NICs.	£9,500
Upper Profits Limit – Earnings up to this limit incur: Class 2 NICs Class 4 NICs at 9% of the profit between the Lower Profits Limit and Upper Profits Limit.	£50,000
Earnings above the Upper Profits Limit Any earnings above this limit incur: Class 2 NICs Class 4 NICs at 9% of the profit between the Lower Profits Limit and Upper Profits Limit Class 4 NICs at 2% of the profit above the Upper Profits Limit.	Over £50,000

Employer National Insurance contributions

	Weekly	Annually
Secondary Threshold – Salary payments above this threshold will incur Employer NICs at 13.8%.	£169	£8,788

As an employer, you may be eligible to claim Employment Allowance to reduce their Employer’s National Insurance bill. From 6th April 2020, the Employment Allowance will apply to smaller businesses only. Businesses with an Employer NI bill of £100,000 or more in the previous tax year will not be able to claim the allowance. For the 2020/21 tax year, the Employment Allowance is increasing to £4,000 (was £3,000 in the 2019/20 tax year).

Student and Postgraduate Loans

	Weekly	Monthly	Annually
Employee earnings threshold for Plan 1	£372.88	£1,615.83	£19,390.00
Employee earnings threshold for Plan 2	£511.05	£2,214.58	£26,575.00
Student Loan Deductions for Plan 1	9.00%
Student Loan Deductions for Plan 2	9.00%
Employee earnings threshold for PostGrad Loan	£403.00	£1,750.00	£21,000.00
PostGrad Loan Deductions	6.00%

Minimum Wage

Age	Hourly
Apprentices	£4.15
Under 18	£4.55
18 to 20	£6.45
21 to 24	£8.20
25 and over	£8.72

Employee Vehicles: mileage allowance payments

Mileage allowance payments are what you pay your employees for using their own vehicle for business journeys.You can pay your employees an approved amount of mileage allowance payments each year without having to report them to HMRC.

Type of vehicle	Rate per business mile 2020 to 2021
Car	For tax purposes: 45 pence for the first 10,000 business miles in a tax year, then 25 pence for each subsequent mile For National Insurance purposes: 45 pence for all business miles
Motorcycle	24 pence for both tax and National Insurance purposes and for all business miles
Cycle	20 pence for both tax and National Insurance purposes and for all business miles

Capital Gains Tax

Capital Gains Tax (CGT) is a tax on the profit made when you sell (or ‘dispose of’) something (an ‘asset’) that’s increased in value. It’s the gain you make that’s taxed, not the amount of money you receive. The tax rate you use depends on the total amount of your taxable income.

Annual exemption from capital gains		£12,300
As a Basic Rate taxpayer	Gains from other residential property	18%
As a Basic Rate taxpayer	Gains from other chargeable assets	10%
As a Higher Rate taxpayer	Gains from other residential property	28%
As a Higher Rate taxpayer	Gains from other chargeable assets	20%
Entrepreneurs’ Relief (The lifetime limit is £1 million for the 2020/21 tax year, reduced from £10 million in the 2019/20 tax year )		10%

In the March 2020 budget, the Chancellor announced that the period allowed to pay any CGT on property sales over to HMRC will be reduced to 30 days from the date of sale. These changes take effect from 6th April 2020.

Dividend Tax Rates

There is no change to dividend tax rates in the 2020/21 tax year:

The tax-free dividend allowance is £2,000
Basic-rate taxpayers pay 7.5% on dividends
Higher-rate taxpayers pay 32.5% on dividends
Additional-rate taxpayers pay 38.1% on dividends.

Corporation Tax

Corporation Tax rate	19%

VAT Registration

VAT Registration threshold – The level of revenue at which you must register for VAT	£85,000

General VAT rates

From 1st December 2020 no VAT will be payable on e-books and online newspapers, magazines and journals. Until then, the rate of VAT on these items remains at 20%.

Standard – The VAT rate applicable to most goods and services	20%
Reduced rate – A lower rate applicable to certain goods and services	5%
Zero rate – A rate applied to some goods and services (food, children’s clothes etc.). Note: this is not the same as items which are exempt from VAT	0%

Director Loan Rate

If loaned amount exceeds £10,000 at any point during the company’s accounting period	2.5% nominal interest on the whole amount plus Class 1A National Insurance contributions (13.8%), and may need to be reported on your P11D. If the loan is not repaid within 9 months of the accounting period end, the company pays extra Corporation Tax of 32.5%, repayable by HMRC when the loan is repaid to the company.

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The Whitehill Partnership LLP is a limited liability partnership registered in England and Wales (no. OC422266 ). Registered office 3C Hopewell House, Whitehill Lane, Royal Wootton Bassett, SN4 7DB. whitehillbusinesssservices ltd is a company registered in England and Wales (no. 5823641). Registered office 3C Hopewell House, Whitehill Lane, Royal Wootton Bassett, SN4 7DB.

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