Page 22 - Budget 2021

INCOME TAX RATES (UK EXCLUDING SCOTTISH TAXPAYERS’ NON-DIVIDEND, NON-
SAVINGS INCOME)

2020/21 2021/22
£ £
Starting rate 0% 0%
Starting rate on savings income 1-5,000 1-5,000
Personal savings allowance (for savings income)
- Basic rate taxpayers 1,000 1,000
- Higher rate taxpayers 500 500
- Additional rate taxpayers Nil Nil
Basic rate 20% 20%
Maximum tax at basic rate+ 7,500+¶ 7,540+¶
Higher rate - 40% 37,501-150,000+¶ 37,701-150,000+¶
Tax on first £150,000+ 52,500+¶ 52,460+¶
Additional rate on income over £150,000 45%¶ 45%¶
Discretionary and accumulation trusts (except dividends) ° 45% 45%
Discretionary and accumulation trusts (dividends) ° 38.1% 38.1%
Dividend nil rate band (dividend allowance) 1-£2,000 1-£2,000
Basic rate on dividends 7.5% 7.5%
Higher rate on dividends 32.5% 32.5%
Additional rate on dividends 38.1% 38.1%
Property allowance £1,000 £1,000
Trading allowance £1,000 £1,000
Rent-a-room relief £7,500 £7,500
High income child benefit charge 1% of benefit per £100 income between
£50,000 and £60,000

+ Assumes starting rate band not available and personal savings allowance is ignored.

If full starting rate band is available:

• £6,540 on first £37,700 in 2021/22 and £6,500 on first £37,500 in 2020/21; and

• £51,460 in 2021/22 and £51,500 in 2020/21 on first £150,000.

¶ For Scotland, the 2021/22 tax bands and tax rates, which cover only non-dividend and non-savings income, are:

19% starter rate on income up to £2,097
20% basic rate on next slice of income up to £12,726
21% intermediate rate on next slice up to £31,092
41% higher rate on next slice up to £150,000

46% top rate on income over £150,000

Wales can now set its own tax rates, but adhered to the UK bands for 2020/21 and will do so again in 2021/22.

° Up to the first £1,000 of gross income is generally taxed at the standard rate, ie. 20% or 7.5% as appropriate.

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