Personal Tax
The amount that an individual can earn before paying income tax increases on 6 April 2021 to £12,570 (from £12,500). The threshold for higher rate income tax (40%) increases to £50,270 (from £50,000).
The Dividend Allowance for 2021/22 remains at £2,000.
National Minimum Wage
From 1 April 2021, the National Minimum Wages changes to the following amounts, dependent upon the employee’s age:
Apprentice - £4.30 (previously £4.15)
Under 18 - £4.62 (previously £4.55)
18-20 - £6.56 (previously £6.45)
21-22- £8.36 (previously £8.20 for 21-24)
23+ - £8.91 (previously £8.72 for 25+)
Capital Gains Tax
The annual exemption for Capital Gains Tax remains at £12,300 for the 2021/22 tax year.
Pension Relief
The annual allowance for payments into personal pensions remains at £40,000 per tax year, and the lifetime allowance for pension savings remains frozen at £1,073,100 and no longer increases with the Consumer Price Index as originally planned.
Since April 2020, the tapered annual allowance rules continues to now only begin to apply for those who have an income above £240,000 – the £200,000 allowance plus the £40,000 you can save into a pension, an increase from £150,000. However, the minimum annual allowance has been reduced to £4,000 from £10,000, but only affects those with an income over £300,000.
Student Loans
From 6 April 2021, the earnings threshold for Plan 1 loans will increase to £19,895 (previously £19,390) and Plan 2 loans will increase to £27,295 (previously £26,575).
Corporation Tax
The rate of Corporation Tax for all businesses remains at 19% until April 2023.