In this document you will find:
- Capital Allowances
- Capital Taxes
- Corporation Tax
- Duties
- Income Tax Rates and Bands
- Individuals
- Inheritance Tax
- Investments
- ISAs
- National Insurance
- Private Residences
- Tax Free Mileage Allowances
- VAT Rates
Capital Allowances
| 2021/2022 | 2022/2023 | 2023/2024 | |
| Main rate pool: writing down allowance |
18% | 18% | 18% |
| Special rate pool (long life assets, integral features): writing down allowance | 6% | 6% | 6% |
| Annual Investment Allowance (AIA) cap: | £1,000,000 | £1,000,000 | £1,000,000 |
| Structures and Buildings Allowance | 3% | 3% | 3% |
Expenditure within the AIA qualifies for 100% allowance in the year of purchase. The AIA cap is currently £1,000,000 from the 1st January 2019. If the accounting period is shorter or longer than 12-months the AIA cap is apportioned based on the length of the period.
The AIA allows businesses to invest in equipment and fixtures (cars and buildings don't qualify), with 100% tax relief in the year of purchase.
Capital Taxes
Enveloped Dwellings
The annual tax on enveloped dwellings (ATED) applies where a residential property located in the UK is owned by a non- natural person such as; a company, partnership with a corporate member or a collective investment scheme. There are a large number of reliefs and exemptions from the charge, but where such a relief does not apply the ATED charge must be paid by 30 April within the year at the following rates:
| Property value £ | Annual charge 2020/21 £ | 2021/22 | 2022/23 | 2023/24 |
| Up to 500,000 | Nil | Nil | Nil | Nil |
| 500,001 to 1,000,000 | 3,700 | 3,700 | 3,800 | 4,150 |
| 1,000,001 - 2,000,000 | 7,500 | 7,500 | 7,700 | 8,450 |
| 2,000,001 - 5,000,000 | 25,200 | 25,300 | 26,050 | 28,650 |
| 5,000,001 - 10,000,000 | 58,850 | 59,100 | 60,900 | 67,050 |
| 10,000,001 - 20,000,000 | 118,050 | 118,600 | 122,250 | 134,550 |
| Over £20,000,000 | 236,250 | 237,400 | 244,750 | 269,450 |
Capital Gains Tax
The rates and annual exemption for capital gains tax are as follows:
| 2020/21 (£) | 2021/22 | 2022/23 | 2023/24 | |
| Annual exemption | £12,300 | £12,300 | £12,300 | £6,000 |
| Annual exemption for most trustees and personal representatives | £6,150 | £6,150 | £6,150 | £3,000 |
| Rate for gains within the basic rate band | 10% | 10% | 10% | 10% |
| Rate for gains above the basic rate band | 20% | 20% | 20% | 20% |
| Gains on residential property (that do not qualify for private residence relief) within the basic rate band | 18% | 18% | 18% | 18% |
| Gains on residential property (that do not qualify for private residence relief) above the basic rate band | 28% | 28% | 28% | 28% |
| Rate for gains subject to Business Asset Disposal Relief | 10% | 10% | 10% | 10% |
| Lifetime limit for gains subject to Business Asset Disposal Relief | £1,000,000 | £1,000,000 | £1,000,000 | £1,000,000 |
Corporation Tax
Rates
The corporation tax rates for small and large companies was aligned at 20% from April 2015.. The rates for the three financial years to 31 March 2022 are as follows:
| Year beginning 1 April: | 2021 | 2022 | 2023 | 2024 |
| Corporate Tax Rate – Ring fenced | 19% | 19% | 19% | 19% - Marginal relief |
| Corporate Tax main rate – Non-ring fenced | 19% | 19% | 25% | 25% |
| Corporate Tax small profits rate | 19% | 19% | 19% | 19% |
Research and Development (R&D)
Small and medium (SME) companies can claim enhanced deductions for expenditure on R&D projects at 230% of qualifying expenditure. Where the deduction is claimed and the company makes a loss, it can claim a cash credit from HMRC of 14.5% of that loss.
Research and Development Expenditure Credit (RDEC) scheme
Large companies can claim a 13% uplift on the following qualifying expenditure:
- Staffing costs
- Expenditure on externally provided workers
- Software and materials
- Contributions to independent research
- Subcontractors of qualifying bodies and individuals/partnerships
RDEC differs from the previous R&D scheme for large companies as it is an 'above the line' tax credit and can be accounted for in the profit/loss statement.
Enterprise Zones
Around 53 enterprise zones have been formed around the country to encourage investment and job formation. Businesses in some of those zones can claim 100% capital allowances on the equipment they use within the zone. The period for which those 100% allowance are available has been extended by three years to 31 March 2020.
Super Deduction
From 1 April 2021 until 31 March 2023, companies investing in qualifying new plant and machinery assets will be able to claim:
- a 130% super-deduction capital allowance on qualifying plant and machinery investments
- a 50% first-year allowance for qualifying special rate assets
Duties
Stamp Duty Land Tax
Residential Land or property
From 4th December 2014, Stamp Duty Land Tax (SDLT) is charged at each rate on the portion of the purchase price which falls within each rate band.
From 1st April 2016, if buying a residential property means you'll own more than one, you'll normally be subject to an additional 3% charge on the rates detailed below.
From 23 September 2022 to 31 March 2025
| Rate | Property value band |
| 0% | Up to £125,000 |
| 5% | £250,000 - £925,000 |
| 10% | £925,000 - £1,500,000 |
| 12% | Over £1,500,000 |
From 1 October 2021 to 22 September 2022
| Rate | Property value band |
| 0% | Up to £125,000 |
| 5% | £125,000 - £250,000 |
| 5% | £250,000 - £925,000 |
| 10% | £925,000 - £1,500,000 |
| 12% | Over £1,500,000 |
From 1st July 2021 to 30 September 2021 the following rates were applied
| Rate | Property value band |
| 0% | Up to £250,000 |
| 5% | Over £250,000 - £925,000 |
| 10% | Over £925,000 - £1,500,000 |
| 12% | Over £1,500,000 |
First Time buyers relief
From November 2017, further changes were made to the stamp duty system with the introduction of First time buyers relief. The Relief applies to anyone purchasing their first home. Full stamp duty relief is available up to £300,000, with reduced liability up to £500,000. Any purchases above £500,000 would attract the normal stamp duty rates on the whole purchase price.
Non-Residential or mixed property
| Rate from 17 March 2016 | Purchase price/lease premium or transfer value |
| 0% | Up to £150,000 |
| 2% | £150,001 to £250,000 |
| 5% | Over £250,000 |
Lease rentals
| Effective date | Residential property | Non-residential or mixed property | Rate |
| NPV of rents | NPV of rents | % | |
| From 17 March 2016 | Up to £125,000 | Up to £150,000 | 0 |
| Over £125,000 | £150,001 to £5m | 1 | |
| N/A | Over £5m | 2 | |
| From 1 January 2010 | Up to £125,000 | Up to £150,000 | 0 |
| Over £125,000 | Over £150,000 | 1 |
Where the chargeable consideration includes rent, SDLT is payable on the lease premium and on the ‘net present value’ (NPV) of the rent payable.
Where the annual rent for the lease of non-residential property amounts to £1,000 or more, the 0% SDLT band is unavailable in respect of any lease premium
Income Tax Rates and Bands
Recent income tax rates and bands are as follows:
| 2020/21 | 2021/22 | 2022/23 | 2023/24 | |
| Savings rate: 10%, 0% from 2015/16 | Up to £5,000 | Up to £5,000 | Up to £5,000 | Up to £5,000 |
| Dividend Allowance: 0% | Up to £2,000 | Up to £2,000 | Up to £2,000 | Up to £1,000 |
| Basic rate: 20% | Up to £37,500 | Up to £37,700 | Up to £37,700 | Up to £37,700 |
| Higher rate: 40% | £37,501 - £150,000 | £37,701 - £150,000 | £37,701 - £150,000 | £37,701 - £125,140 |
| Additional rate: 45% | Over £150,000 | Over £150,000 | Over £150,000 | Over £125,140 |
When the personal allowance is taken into account an individual will start to pay tax at 40% when their total income exceeds £50,270 in 2021/22. This threshold (and the 45% threshold) can be increased if the taxpayer pays personal pension contributions or makes gift aid donations.
For 2021/22 the intermediate rate band on non-savings income for Scottish Taxpayers is set at £43,662. For all other income types it remains in line with the main UK band of 50,000.
Scottish Income Tax Rates and Bands for non-savings income
| 2020/21 | 2021/22 | 2022/23 | 2023/24 | |
| Starter rate: 19% | Up to £2,085 | Up to £2,097 | Up to £2,162 | Up to £2,162 |
| Basic rate: 20% | £2,086 to £12,658 | £2,098 to £12,726 | £2,163 to £13,118 | £2,163 to £13,118 |
| Intermediate rate: 21% | £12,659 to £30,930 | £12,727 to £31,092 | £13,118 to £31,092 | £13,118 to £31,092 |
| Higher rate: 42% | £30,931 to £150,000 | £31,093 to £150,000 | £31,093 to £150,000 | £31,093 to £125,140 |
| Additional rate: 47% | Over £150,000 | Over £150,000 | Over £150,000 | Over £125,140 |
Individuals
Personal Allowances
The standard personal allowance is £12,570 for 2021/22, 2022/23 and 2023/24.
The transferrable marriage allowance applies from 6 April 2015 to couples (married or civil partners) where neither person pays tax at the 40% or 45% rates. The spouse who cannot use all their personal allowance against their own income may opt to transfer 10% of their personal allowance to their spouse or civil partner.
The personal allowance is tapered away for individuals who have income over £100,000, at the rate of £1 for every £2 of income above that threshold.
The allowances for recent years are as follows:
Minimum married couples allowance, Marriage allowance, Income limit for allowances for Married couple’s allowance, Personal allowance removed completely at:
| 2020/21 (£) | 2021/22 (£)* | 2022/23 (£) | 2023/24 (£) | |
| Personal Allowances | £12,500 | £12,570 | £12,570 | £12,570 |
| Minimum married couples allowance | £3,510 | £3,530 | £3,640 | £4,010 |
| Maximum married couples allowance | £9,075 | £9,125 | £9,415 | £10,375 |
| Marriage allowance | £1,250 | £1,260 | £1,260 | £1,260 |
| Blind person's allowance | £2,500 | £2,520 | £2,600 | £2,870 |
| Income limit for allowances for Married couple’s allowance | £30,200 | £30,400 | £31,400 | £31,400 |
| Income limit for standard allowances | £100,000 | £100,000 | £100,000 | £100,000 |
| Personal allowance removed completely at: | £125,000 | £125,140 | £125,140 | £125,140 |
*2020/21 figures were announced in the 2020 Spring Budget and are subject to enactment.
Inheritance Tax
The inheritance tax (IHT) nil rate band will remain frozen at £325,000 until April 2026, and the rates of IHT payable on death remain unchanged at 40% or 36% where at least 10% of the net estate is left to charity.
The government will consult on extending the existing IHT exemption for the estates of members of the armed forces, whose death is caused or hastened by injury while on active service, to members of the emergency services.
An additional nil-rate band (the ‘residence nil rate band’ (RNRB)) was introduced from 2017/18 and applies when a residence is passed on death to direct descendants. The RNRB is being phased in between 2017/18 and 2021/22 as follows:
- £100,000 in 2017/18
- £125,000 in 2018 /19
- £150,000 in 2019/20
- £175,000 in 2020/21
- £175,000 in 2021/22
- £175,000 in 2022/23
- £175,000 in 2023/24
The value of RNRB is tapered away at £1 for every £2 by which the value of the total estate exceeds £2 million.
Investments
Seed Enterprise Investment Scheme (SEIS)
SEIS was introduced to encourage people to invest in companies that have just started trading by offering tax reliefs to investors that buy shares in the company.
The table below shows the income and capital gains tax reliefs that apply:
| SEIS | |
| Rate of income tax relief | 50% |
| Maximum investment qualifying for income tax relief | £100,000 |
| Gains exempt from CGT relief on investment in SEIS shares: | 50% |
Enterprise Investment Scheme (EIS)
EIS is available to companies that are looking to grow by offering tax reliefs to investors that buy new shares in the company.
The table below shows the income and capital gains tax reliefs that apply:
| EIS | |
| Rate of income tax relief | 30% |
| Maximum investment qualifying for income tax relief | £1,000,000 |
| Gains exempt from CGT relief on investment in SEIS shares: | 100% |
Social Investment Tax Relief (SITR)
SITR is available to encourage people to support social enterprises.
The table below shows the income and capital gains tax reliefs that apply:
| SITR | |
| Rate of income tax relief | 30% |
| Maximum investment qualifying for income tax relief | £1,000,000 |
| Gains exempt from CGT relief on investment in EIS shares: | 100% |
Venture Capital Trusts (VCTs)
VCTs are available to encourage people to invest in companies and social enterprises that are not listed on any recognised stock exchange.
The table below shows the income and capital gains tax reliefs that apply:
| VCT | |
| Rate of income tax relief | 30% |
| Maximum investment qualifying for income tax relief | £200,000 |
ISAs
The ISA investment limits are as follows:| 2019/2020 | 2020/2021 | 2021/2022 | 2022/2023 | |
|---|---|---|---|---|
| ISA for shares and/or cash | £20,000 | £20,000 | £20,000 | £20,000 |
| Junior ISA and Child Trust Fund | £4,368 | £9,000 | £9,000 | £9,000 |
From 1 December 2015 first time buyers can open a help to buy ISA to help save for their first home. The Government will contribute a 25% bonus, up to £3,000 per ISA
+which is paid when the funds are used to buy the home. Though phased out in November 2019 the Help to buy ISA is still operating for existing account holders.
From 6 April 2017 UK resident individuals aged between 18 and 40 may open a lifetime ISA to save up to £4,000 per year. The Government will contribute a 25% bonus up to £1,000 per year. The funds can be withdrawn from age 60 onwards or when the saver is terminally ill. The savings may also be used to help purchase the saver’s first home worth up to £450,000, after the account has been open for at least 12 months. The Government bonus will be lost if the funds are accessed for other purposes.
Premium Bonds
Individuals may invest up to £50,000 in premium bonds. Any winnings are tax free. The odds of winning a prize for each £1 bond number are currently 24,500 to 1. The annual prize fund interest rate is currently 1.40% (December 2017). There are two £1m prizes and four £100,000 prizes per month.National Insurance
The rates and thresholds for National Insurance Contributions for 2022/23 are:
| Class: | Monthly earnings | Rate |
| Employer Class 1 above Secondary threshold | Over £758 | 15.05% |
| Employee's class 1 | £823 to £4189 | 13.25% |
| Employee's additional class 1 | Over £4189 | 3.25% |
| Married woman's rate* | £823 to £4189 | 7.1% |
| Self-employed class 2 (per week) | N/A | £3.15 |
| Share fishermen class 2 (per week) | N/A | £3.80 |
| Volunteer development workers class 2 | N/A | £6.15 |
| Class 3 (per week) | N/A | £15.85 |
| Annual profit thresholds | ||
| Self-employed class 4 | £11,908 to £50,270 | 10.25% |
| Self-employed class 4 additional rate | Over £50,270 | 3.25% |
*only available for women who made a valid married woman's election before 11 May 1977.
Private Residences
Main residence relief (also known as ‘principal private residence’ relief (PPR)) provides relief from capital gains tax on the disposal of (or of an interest in) a dwelling which has been the individual’s only or main residence, and on land enjoyed with that residence as its garden or grounds up to half a hectare, or more if the additional land is required for the reasonable enjoyment of the property.
The relief is time apportioned for periods of occupation, and for certain periods of deemed occupation. In particular, relief for the final 18 month period of ownership is given, if the property was at some time the individual’s only or main residence.
Where two or more properties are owned, the taxpayer may elect, within certain time limits, which property is to be treated as his main residence.
Married couples and civil partners may have only one main residence at any time between them which qualifies for the relief.
Lettings relief
If the main residence has been wholly or partly let as residential accommodation at any time in the period of ownership, lettings relief can provide an exemption for gains limited to the lower of:
- the gain attributable to the let period;
- £40,000 per owner; and
- the gain exempt as main residence relief.
*Lettings relief was removed from 06th April 2020
Tax Free Mileage Allowances
| First 10,000 business miles in the tax year | Each mile over 10,000 miles in the tax year | Extra passenger making same trip | |
| Cars and vans | 45p | 25p | 5p |
| Motorcycles | 24p | 24p | N/A |
| Bicycles | 20p | 20p | N/A |
These rates represent the maximum tax-free mileage allowances for employees using their own vehicles for business. Any excess is taxable. If the employee receives less than the statutory rate, tax relief can be claimed on the difference.
VAT Rates
The VAT rates and thresholds are as follows:
| From | 1 April 2019 | 1 April 2020 | 1 April 2021 | 1 April 2022 | 1 April 2023 |
| Lower rate | 0% | 0% | 0% | 0% | 0% |
| Reduced rate | 5% | 5% | 5% | 5% | 5% |
| Standard rate | 20% | 20% | 20% | 20% | 20% |
| Registration turnover | £85,000 | £85,000 | £85,000 | £85,000 | £85,000 |
| Deregistration turnover | £83,000 | £83,000 | £83,000 | £83,000 | £83,000 |
| Acquisitions from EU member states, registration and deregistration threshold | £85,000 | £85,000 | £85,000 | £85,000 | £85,000 |
For the period 15 July 2020 to 12 January 2021 there is a temporary 5% reduced rate of VAT for certain supplies of hospitality, hotel and holiday accommodation, and admissions to certain attractions.
