2019/20 2020/21
Income tax rates: England and Wales (non-dividend income) £ £
20% basic rate tax 12,501-50,000 12,501-50,000
40% higher rate tax 50,001-150,000 50,001-150,000
45% additional rate tax Above 150,000 Above 150,000
Scottish rates of income tax (non-dividend income)
19% starting rate 12,501-14,549 12,501-14,585
20% basic rate tax 14,550-24,944 14,586-25,158
21% intermediate rate tax 24,945-43,430 25,159-43,430
41% higher rate tax 43,431-150,000 43,431-150,000
46% top rate Above 150,000 Above 150,000
Income tax rates (dividend income)  
Dividend allowance £2,000 £2,000
Dividend ordinary rate (for dividends within basic rate band) 7.50% 7.50%
Dividend upper rate (for dividends within higher rate band) 32.50% 32.50%
Dividend additional rate (for dividends above higher rate band) 38.10% 38.10%
Personal allowances    
Personal allowance 12,500 12,500
Dividend allowance 2,000 2,000
Personal savings allowance for basic rate taxpayers 1,000  1,000
Personal savings allowance for higher rate taxpayers 500  500
Personal savings allowance for additional rate taxpayers 0 0
Rent-a-room relief 7,500  7,500
Transferable tax allowance for married couples/civil partners 1,250 1,250
Micro entrepreneur’s allowance: For individuals making property or trading incomes 1,000 each 1,000 each
National insurance 2019/20 2020/21
Lower earnings limit, primary class 1 (per week) £118  £120
Upper earnings limit, primary class 1 (per week) £962  £962
Primary threshold (per week) £166 £183
Secondary threshold (per week) £166  £169
Employment allowance (per year/employer) £3,000 £4,000
Employee’s primary class 1 rate between primary threshold and upper earnings limit 12%  12%
Employee’s primary class 1 rate above upper earnings limit 2%  2%
Employer’s secondary class 1 rate above secondary threshold 13.80%  13.80%
Class 2 rate (per week where profits are above small profits threshold)  

3.00%

3.05%
Class 2 small profits threshold (per year) £6,365 £6,475
Special class 2 rate for share fishermen (per week) 3.65%  3.70%
Special class 2 rate for volunteer development workers 5.90%  6.00%
Class 3 voluntary rate (per week) 15.00%  15.30%
Class 4 lower profits limit 8,632  9,500
Class 4 upper profits limit £50,000  £50,000
Class 4 rate between lower profits limit and upper profits limit 9.00%  9.00%
Class 4 rate above upper profits limit 2.00%  2.00%
Pensions
Annual allowance 40,000 40,000
Lifetime allowance 1,055,000  1,073,100
Money purchase annual allowance 4,000  4,000
 
 

 

 
Reliefs and incentives £  £
Enterprise Investment Scheme (EIS) – maximum £1,000,000 £1,000,000
Venture Capital Trust (VCT) – maximum £200,000 £200,000
Enterprise Management Incentive Scheme (EMI) – employee limit up to the value of £250,000 in a three-year period £250,000 £250,000
Seed Enterprise Investment Scheme (SEIS) – maximum £100,000 £100,000
Social Investment Tax Relief (SITR) – maximum £1,000,000 £1,000,000
Income tax relief on EIS and VCT schemes 30% 30%
Income tax relief on SEIS schemes 50% 50%
Income tax relief on SITR schemes 30% 30%
Individual Savings Account (ISA):  
ISA (NISA) annual limit 20,000 20,000
Junior ISA investment annual limit – under 18, living in the UK 4,368 9,000
Child Trust Fund annual limit 4,368 9,000
Lifetime ISA annual limit 4,000 4,000
Capital gains tax    
Rate – basic rate taxpayer  10%  10%
        – higher rate taxpayer  20%  20%
Gain on sale of residential property – basic rate taxpayer 18% 18%
                                                        – higher rate taxpayer 28% 28%
Annual exemptions – individuals (per year) £12,000 £12,300
Certain trusts for disabled persons (per year) £12,000 £12,300
Other trusts (per year) £6,000 £6,150
Entrepreneurs’ Relief lifetime limit £10,000,000 £1,000,000
Investors’ Relief lifetime limit £10,000,000 £10,000,000
Entrepreneurs’/Investors’ rate 10% 10%
Chattels exemption £6,000 £6,000
Inheritance tax    
Single person’s nil-rate band £1-£325,000 £1-£325,000
Single person’s 40% band over £325,000 over £325,000
Residence nil-rate band (RNRB) – maximum £150,000 £175,000
Reduced rate 36% 36%
IHT rate (for chargeable lifetime transfers) 20% 20%
Married couples or civil partnerships allowance nil-rate band £650,000 £650,000
Gifts to charities Exempt Exempt
Small gifts to same person £250 £250
General gifts – annual exemption £3,000 £3,000
Wedding gifts from parent £5,000 £5,000
Wedding gifts from grandparent/party £2,500 £2,500
Wedding gifts from any other person £1,000 £1,000
Business Property Relief Business or interest in a business and transfer if unquoted shareholdings  100%  100%
Corporation tax    
All profits and gains (excluding determination agreements and diverted profits 19% 19%
S455 tax on all loans made by close companies to participator 32.50% 32.50%
Capital allowances    
Main writing-down allowance (reducing balance) 18% 18%
Special rate writing-down allowance (reducing balance) 6% 6%
Structures and buildings allowance (SBA) 2% 3%
Motor cars if CO2 > 50g/km but does not exceed 110g/km 18% 18%
Motor cars if CO2 > 110g/km 6% 6%
FYA New and unused motor cars if CO2 emissions less than 50 g/km (or car is electric) and certain energy-saving/water-efficient products 100% 100%
Small pool write-off where WDV is £1,000 or less
Annual Investment Allowance
100% 100%
Annual investment allowance (AIA) £1,000,000 £1,000,000
Research and development tax credit rates    
SME rate 230%  230%
Research and development SME payable credit 14.5% 14.5%
Research and development expenditure credit (RDEC) scheme 12%  13%
Film/High-end TV/videogames tax credit 25% 25%
Open-ended investment companies and authorised unit trusts 20% 20%
Patent box    
Patent box 10% 10%
VAT    
Standard rate 20% 20%
Reduced rate 5% 5%
Zero rate 0% 0%
Flat rate of VAT on gross turnover (for limited cost trader) 16.5% 16.5%
Normal scheme registration threshold £85,000 £85,000
Deregistration threshold £83,000 £83,000
Cash accounting scheme – maximum to join £1,350,000 £1,350,000
Cash accounting scheme – exit threshold £1,600,000 £1,600,000
Annual accounting scheme – maximum to join £1,350,000 £1,350,000
Annual accounting scheme – exit threshold £1,600,000 £1,600,000
Flat-rate scheme – maximum allowed to join £150,000 £150,000
Flat-rate scheme exit threshold £230,000 £230,000

March 2020 onward

LEGAL NOTICE

This is a basic guide prepared by ACCA UK‘s Technical Advisory Service for members and their clients. It should not be used as a definitive guide, since individual circumstances may vary. Specific advice should be obtained, where necessary. For more information contact Harris Accountancy Services Ltd on 01214558055 or email sajjad@harrisaccountancy.co.uk

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