Page 27 - Budget 2021

PENSIONS

2020/21 2021/22
Lifetime allowance* £1,073,100 £1,073,100
Lifetime allowance charge:
Excess drawn as cash 55% of excess
Excess drawn as income 25% of excess
Annual allowance £40,000 £40,000
Annual allowance taper:¶
Threshold income limit £200,000 £200,000
Adjusted income limit £240,000 £240,000
Minimum annual allowance £4,000 £4,000
Money purchase annual allowance £4,000 £4,000
Annual allowance charge 20%-45% of excess
Max. relievable personal contribution 100% relevant UK earnings or £3,600 gross if greater

* May be increased under 2006, 2012, 2014 or 2016 transitional protection provisions.
¶ 50% taper down to the minimum allowance based on excess over adjusted income limit if threshold income limit is
also exceeded

NATIONAL INSURANCE CONTRIBUTIONS

CLASS 1 EMPLOYEE
2020/21 2021/22
Employee Employer Employee Employer
+
Main NIC rate 12% 13.8% 12% 13.8%
No NICs on first:
Under 21* £183 pw £962 pw £184 pw £967 pw
21* & over £183 pw £169 pw £ 184 pw £170 pw
Main NIC charged up to £962 pw No limit £967 pw No limit
Additional NIC rate 2% N/A 2% N/A
on earnings over £962 pw £967 pw

* Under 25 for apprentices
+ No employer NICs for armed forces veterans in first 12 months of employment up to the upper secondary threshold

EMPLOYMENT ALLOWANCE
2020/21 2021/22

Per business* £4,000 £4,000

* Not available if a director is the sole employee or the previous tax year’s secondary NICs were £100,000 or more

Limits and Thresholds 2020/21 2021/22
Weekly Yearly Weekly Yearly
£ £ £ £
Lower earnings limit 120 6,240 120 6,240
Primary earnings threshold 183 9,500 184 9,568
Secondary earnings threshold 169 8,788 170 8,840
Upper secondary threshold – U21s* 962 50,000 967 50,270
Upper earnings limit 962 50,000 967 50,270

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