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Step-by-step Guide

Tax Rates and Allowances

Article ID: 2435
Last updated: 20 Apr, 2023

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Income tax

Income Tax Allowances

2022/23

2021/22

2020/21

2019/20

2018/19

Personal Allowance (1)

£12,570

£12,570

£12,500

£12,500

£11,850

Personal Savings Allowance Basic Rate Taxpayers

Personal Savings Allowance Higher Rate Taxpayers

£1,000

£500

£1,000

£500

£1,000

£500

£1,000

£500

£1,000

£500

Income Limit for Personal Allowance(2)

£100,000

£100,000

£100,000

£100,000

£100,000

Income limit for age-related allowances (Married Couples Allowance from 2016/17) (3)

£31,400

£30,400

£30,200

£29,600

£28,900

Blind Person’s allowance

£2,600

£2,520

£2,500

£2,450

£2,320

Maximum amount of Married Couple’s allowance (2) (4)

£9,415

£9,125

£9,075

£8,915

£8,695

Transferable Tax Allowance for married couples and civil partners (5)

£1,260

£1,260

£1,250

£1,250

£1,190

Dividend allowance (6)

£2,000

£2,000

£2,000

£2,000

£2,000

Rent a room limit

£7,500

£7,500

£7,500

£7,500

£7.500

  1. From 2017/18 onwards, all individuals will be entitled to the same personal allowance, regardless of the individuals' date of birth.
  2. The personal allowance is reduced by £1 for every £2 of income in excess of the £100,000 limit irrespective of date of birth.
  3. Married couples allowance reduces by £1 for every £2 of income in excess of the income limit, reducing to the minimum allowance (£3,510 2020/21). It can be reduced further under (2).
  4. The relief is limited to 10% and can only be claimed if at least one spouse was born before 6 April 1935. The allowance is reduced where income exceeds the age related income limit down to a minimum of £3,510 2020/2021.The allowance extends to Civil Partnerships.
  5. Available to those born after 5 April 1935. It allows a spouse or civil partner who is not liable to income tax above the basic rate to transfer this amount of their personal allowance to their spouse/civil partner. The recipient must not be liable to tax above the basic rate.
  6. From April 2016, the Dividend Allowance means that individuals will not have to pay tax on the first £2,000 (2020/21) of dividend income they receive. From 1 April 2023 the Dividend Allowance is reduced to £1,000 and from 1 April 2024 will further reduce to £500.

Tax bands and corresponding tax rates

2022/23

2021/22

2020/21

2019/20

2018/19

Starting Rate for savings income

0%

0%

0%

0%

0%

Starter Rate

In Scotland

19%

19%

19%

19%

N/A

Basic Rate in

England & Northern Ireland

20%

20%

20%

20%

20%

Basic Rate in

Scotland

20%

20%

20%

20%

20%

Basic Rate

In Wales

20%

20%

20%

20%

20%

Intermediate Rate in Scotland

21%

21%

21%

21%

N/A

Higher Rate in England

& Northern Ireland

40%

40%

40%

40%

40%

Higher Rate in Scotland

41%

41%

41%

41%

N/A

Higher Rate in Wales

40%

40%

40%

40%

40%

Additional Rate in England

& Northern Ireland

45%

45%

45%

45%

45%

Top Rate in Scotland

46%

46%

46%

46%

45%

Top Rate in Wales

45%

45%

45%

45%

45%

Dividend Basic Rate

8.75%

7.5%

7.5%

7.5%

7.5%

Dividend Higher Rate

33.75%

32.5%

32.5%

32.5%

32.5%

Dividend Additional Rate

39.35%

38.1%

38.1%

38.1%

38.1%

Starting Rate Limit

£5,000

£5,000

£5,000

£5,000

£5,000

Basic Rate Band in England, Wales & Northern Ireland

£0 - 37,700

£0 - 37,700

£0 - £37,500

£0 - £37,500

£0 - £33,500

Higher Rate Band in England, Wales & Northern Ireland

£37,701 - £150,000

£37,701 - £150,000

£37,501 - £150,000

£37,501 - £150,000

£33,501 - £150,000

Additional Rate in England, Wales & Northern Ireland

Over £150,000*

Over £150,000

Over £150,000

Over £150,000

Over £150,000

* Reducing to £125,140 from April 2023

Tax bands for Scotland

2022/23

2021/22

2020/21

2019/20

2018/19

Starter Rate Band

£12,571 - £14,732

£12,571 - £14,667

£12,501 - £14,585

£12,500 - £14,549

11,580

Basic Rate Band

£14,733- £25,688

£14,668- £25,296

£14,586 - £25,158

£14,550 - £24,944

£13,850

Intermediate Rate Band

£25,689 - £43,662

£25,297 - £43,662

£25,159 - £43,430

£24,945 - £43,430

£24,000

Higher Rate Band

£43,663 - £150,000

£43,663 - £150,000

£43,431 - £150,000

£43,431 - £150,00

£43,430

Top Rate Band

Over £150,000

Over £150,000

Over £150,000

Over £150,000

Over £150,000

You do not get a Scottish personal allowance in if you earn over £125,140 (2021/22)

National Insurance Contributions

Rates

2022/23

2021/22

2020/21

2019/20

2018/19

Class 1 (Earnings between Primary and Upper earnings limits)

12%*

12%

12%

12%

12%

Class 1 (Earnings above Upper earnings limit)

2%*

2%

2%

2%

2%

Class 1(Employers NI earnings over Primary earnings limit)

13.8%*

13.8%

13.8%

13.8%

13.8%

Class 1A (Employers NI on Benefits)

14.53%

13.8%

13.8%

13.8%

13.8%

Class 2 (Flat rate for self-employed)

£3.15 pw

£3.05 pw

£3.00 pw

£3 pw

£2.95 pw

Class 3 (Voluntary)

£15.40pw

£15.40pw

£15.30 pw

£15 pw

£14.65pw

Class 4 (Self-Employed Profits between Lower and Upper earnings limits)

9.73% on profits between £11,909 and £50,270

9% on profits between £9,569 and £50,270

9% on profits between £9,500 and £50,000

9% on profits between £8,632 and £50,000

9% on profits between £8,424 and £50,000

Class 4 (Self-Employed profits above Upper earnings limit)

2.73% on profits over £50,270

2% on profits over £50,270

2% on profits over £50,000

2% on profits over £50,000

2% on profits over £46,350

* Temporary increase from 6 April to 5 July 2022

  • Class 1 employees earnings between primary and upper limit  13.25%
  • Class 1 employees earnings above upper earnings limit  3.25%
  • Class 1 employers earnings over primary limit   15.05%

National Insurance Contributions

 

2022/23

2021/22

2020/21

2019/20

2018/19

Weekly Lower Earnings Limit (LEL)

£123 pw

£120 pw

£120 pw

£118 pw

£116pw

Weekly Primary Threshold (PT)

£242 pw*

£184 pw

£183 pw

£166 pw

£162 pw

Secondary Threshold (ST)

£175 pw

£170 pw

£169 pw

£166 pw

£162 pw

Upper Earnings (UEL)

£967 pw

£967 pw

£962 pw

£962 pw

£892 pw

Upper Profits Limit (UPL)

£50,270 per year

£50,270 per year

£50,000   per year

£50,000   per year

£46,350 per year

Upper Secondary Thresholds for U21’s

£967 pw

£967 pw

£962 pw

£962 pw

£892 pw

Small Profits Threshold (SPT)

£6,725   per year

£6,515   per year

£6,475    per year

£6,365   per year

£6,205 per year

Lower Profits Limit (LPL)

£11,908  per year

£9,568  per year

£9,500    per year

£8,632   per year

£8,424   per year

Employment Allowance

£5,000   per year

£4,000   per year

£4,000    per year   

£3,000   per year

£3,000 per year

Apprentice Upper Secondary Threshold (AUST) for under 25’s

£967

£967

£962

£962

£892

* Temporary increase from 6 April to 5 July 2022 

Weekly primary threshold £190

Working and Child Tax Credits

Working Tax Credit and Child Tax Credit have been replaced by Universal Credit for most people.

Working Tax Credit (per year unless stated otherwise)

2022/23

2021/22

2020/21

2019/20

2018/19

Basic Element

£2,070

£2,005

£3,040   £1,960

£1,960

Couple and lone parent element

£2,125

£2,060

£2,045

£2,010

£2,010

30 hour element

£860

£830

£825

£810

£810

Disabled worker element

£3,345

£3,240

£3,220

£3,165

£3,090

Severe disability element

£1,445

£1,400

£1,390

£1,365

£1,330

CHILDCARE ELEMENT

Maximum eligible cost for one child

£122.50 pw

£175 pw

£175 pw

£175 pw

£175 pw

Maximum eligible cost for two or more children

£ 210pw

£ 300 pw

£300 pw

£300 pw

£300 pw

Percent of eligible costs covered

70%

70%

70%

70%

Child Tax Credit (per year)

2022/23

2021/22

2020/21

2019/20

2018/19

Family element

£545

£545

£545         £545

£545

Child element

£2,935

£2,845

£2,830

£2,780

£2,780

Disabled child element

£3,545

£3,435

£3,415

£3,355

£3,275

Severely disabled child element

£1,430

£1,390

£1,385

£1,360

£1,325

 

Child Benefit and Guardian's Allowance

Per Week

2022/23

2021/22

2020/21

2019/20

2018/19

Child Benefit – Eldest or only Child

£21.80

£21.15

£21.05

£20.70

£20.70

Child Benefit – other children

£14.45

£14.00

£13.95

£13.70

£13.70

Guardian’s Allowance

£18.55

£18.00

£17.90

£17.60

£17.20

Tax Free Savings Accounts

2022/23

2021/22

2020/21

2019/20

2018/19

Individual Savings Account (ISA) subscription limit

£20,000

£20,000

£20,000

£20,000

£20,000

Junior ISA subscription limit

£9,000

£9,000

£9,000

£4,368

£4,260

Child Trust Fund (CTF) subscription limit

£9,000

£9,000

£9,000

£4,368

£4,260

Help to Buy ISA – Government Bonus up to

£3000

£3000

£3000

£3000

£3,000

Fuel Benefit Charge

2022/23

2021/22

2020/21

2019/20

2018/19

Car fuel benefit charge multiplier

£27,800

£25,300

£24,500

£24,100

£23,400

Van fuel benefit charge

£757

£688

£666

£655

£633

Van Benefit Charge

2022/23

2021/22

2020/21

2019/20

2018/19

Van benefit charge

£3,960

£3,600

£3,430

£3,350

£3,230

Authorised Mileage Rates

Per mile

2022/23

2021/22

2020/21

2019/20

2018/19

CARS

First 10,000 miles

45p

45p

45p

45p

45p

Additional miles

25p

25p

25p

25p

25p

Each qualifying passenger

5p

5p

5p

5p

5p

OTHER VEHICLES

Motorcycles

24p

24p

24p

24p

24p

Bikes

20p

20p

20p

20p

20p

Capital Gains Tax

2022/23

2021/22

2020/21

2019/20

2018/19

For taxpayers gains falling in the basic rate tax band (residential property and carried interest)

10%(18%)

10%(18%)

10%(18%) 

10%(18%)

10%(18%)

For trustees and taxpayers gains falling into higher/additional rate tax bands (residential property and carried interest)

20%(28%)

20%(28%)

20%   (28%)

20%(28%)

20%(28%)

Annual Exempt Amount – Individuals

£12,300

£12,300

£12,300

£12,000

£11,700

Annual Exempt Amount – Trusts

£6,150

£6,150

£6,000

£5,850

£5,650

Entrepreneurs relief (BADR) lifetime limit

£1m

£1m

£10m

£10m

£10m

Entrepreneurs rate

10%

10%

10%

10%

10%

VAT

VAT Rates

2022/23

2021/22

2020/21

2019/20

2018/19

Standard rate

20%

20%

20%

20%

20%

Reduced rate

5%

5%

5%

5%

5%

VAT Registration Thresholds

2022/23

2021/22

2020/21

2019/20

2018/19

Registration threshold

£85,000

£85,000

£85,000

£85,000

£85,000

De-registration threshold

£83,000

£83,000

£83,000

£83,000

£83,000

Capital Allowances

Expenditure on:

2022/23

2021/22

2020/21

2019/20

2018/19

Plant & Machinery

18%

18%

18%

18%

18%

Plant & Machinery in certain enterprise zones

100%

100%

100%

100%

100%

Cars bought from April 2018:

<50g/km

100%

100%

100%

100%

>51g/km – 110g/km

18%

18%

18%

18%

>110g/km

6%

6%

8%

8%

New and unused zero emission goods vehicles

100%

100%

100%

100%

100%

Long life assets / integral features in buildings

6%

6%

8%

8%

Research and Development

100%

100%

100%

100%

Energy saving and water efficient plant and machinery

N/A

N/A

N/A

100%

100%

Structures and buildings allowance(straight line)

3%

3%

3%

2%

2%

For Super Deduction please refer to our knowledge based article Super-Deduction and FYA capital allowances available from 1 April 2021

Annual Investment Allowance

1 Jan 2019

to

31 March 2024

1 Jan 2016

to

31 Dec 2018

1 Apr 2014

to

31 Dec 2015

1 Jan 2013

to

31 Mar 2014

100% allowance up to

£1,000,000

£200,000

£500,000

£250,000

For additional information HMRC Annual Investment Allowance

Corporation Tax

Corporation Tax

2022/23

2021/22

2020/21

2019/20

2018/19

Main rate

(all profits except ring fence)

19%

19%

19%

19%

19%

Special rate for unit trusts and open-ended investment companies

20%

20%

20%

20%

20%

Pension Contributions

2022/23

2021/22

2020/21

2019/20

2018/19

Annual Allowance (see notes)

£40,000

£40,000

£40,000

£40,000

£40,000

Lifetime Allowance

£1,073,100

£1,073,100

£1,073,100

£1,055,000

£1,030,000

Money Purchase Annual Allowance

£4,000

£4,000

£4,000

£4,000

£4,000

  1. Tax relief is given for pension contributions up to the lower of 100% of earnings or the maximum contribution. The maximum contribution is the annual allowance plus unutilised annual allowances from the three previous years. Up to £3,600 may be contributed to a pension irrespective of earnings.
  2. From 2016/17 the annual allowance is reduced by £1 for every £2 of adjusted income over £150,000, (and threshold income exceeds £110,000) to a minimum of £10,000.
  3. From 2020/21 the annual allowance is reduced by £1 for every £2 of adjusted income over £240,000 (and threshold income exceeds £200,000) to a minimum £4,000.
 

Inheritance Tax

2022/2023

2021/22

2020/21

2019/20

2018/19

Nil Rate Band

£325,000

£325,000

£325,000

£325,000

£325,000

Main residence nil rate band

£175,000

£175,000

£150,000

£125,000

£100,000

Rate over nil band

40%

40%

40%

40%

40%

Stamp Duty

INCREMENTAL RATES AS OF 4/12/14*

Primary Property

Additional Properties

£1 - £250,000

Nil

3% (1)

£250,001 - £925,000

5%

8%

£925,001 - £1,500,000

10%

13%

Above £1,500,000

12%

15%

*There are different rules for the buying of a first home when the purchase price is less than £500,000

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Article ID: 2435
Last updated: 20 Apr, 2023
Revision: 61
Views: 23266
This article was:  


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