Personal Income Tax & Benefits

2021 - 2022

2020 - 2021

Notes

Personal Allowance (PA)

£  12,570

£  12,500

(Reduce Personal Allowance by £1 for every £2

of adjusted Net Income over £100,000)

Basic Rate Band - Income up to:

£ 37,700

£ 37,500

Starting Rate

0.0%

0.0%

<< Please contact us for more information >>

Basic Rate

20.0%

20.0%

Dividend Ordinary Rate

7.5%

7.5%

For 2020/21 and 2021/22 the first £ 2,000 of dividends is tax-free

Higher Rate - Income between

£ 37,701 - £  150,000

£ 37,501 - £ 150,000

Higher Rate

40.0%

40.0%

Dividend Upper Rate

32.5%

32.5%

For 2019/20 and 2020/21 the first £ 2,000 of dividend is tax-free

Additional Rate - Income over

£ 150,000

£ 150,000

Additional Rate

45.0%

45.0%

Dividend Additional Rate

38.1%

38.1%

Savings Rate Limit

£ 5,000

£ 5,000

<< Please contact us for more information >>

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Pension Contributions

There is no financial limit on the amount that may be contributed to a registered pension scheme.  The maximum amount on which an individual can claim tax relief in any tax year is the greater of the individual's  UK relevant earnings or £ 3,600 (gross).  If the total pension input exceeds the annual allowance (£ 40,000) there may be a tax charge on the excess.

Maximum age for Tax Relief

74

Minimum age for taking Benefits

55

Lifetime Allowance Charge

-  lump sum paid

-  monies retained

55%

25%

<< Please contact us for more information on pensions >>

on cumulative benefits exceeding

£1073100

Subject to transitional protection for excess amount.

Maximum tax-free lump sum

25%

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Company Cars and Vans

Notes

Company Car Benefit

is calculated by applying the appropriate percentage - based on the car's CO2 emissions - to the car's UK Price List.

  < Click for our downloadable CO2  Emission Table >

Company Car Fuel Benefit

is charged unless the cost of all fuel for private use is borne by the employee.  The taxable benefit is calculated by applying the appropriate % to the car fuel benefit charge multiplier (£ 24,600).

VAT

Where VAT is to be reclaimed on fuel for private use, the employer also has to account for the output tax based on a flat-rate charge derived from the vehicles CO2 emissions

Company Van Benefit

 is generally not related to CO2 emissions but is a set figure of £ 3,500 with an extra £ 669 where fuel for private use is provided.  Van benefit charge for zero emission vans is £ 1,340.

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