Tax Rates and Allowances 2021/2022
Personal Allowances 2021/22
Personal Allowance – £12,570
The personal allowance reduces by £1 for every £2 of income above £100,000. The personal allowance is lost if taxable income exceeds £125,140 (2021/22).
Transferable tax allowance for married couples/civil partners – £1,260
Investment income allowances tax at 0%
Personal Savings Allowance (PSA) – £1,000 for Basic rate taxpayers
– £500 for Higher rate taxpayers
– Not available for Additional rate taxpayers
Dividend Allowance – £2,000
Other Allowances and Exemptions
Trading income allowance – £1,000
Property income allowance – £1,000
Rent a room relief – £7,500
Blind persons’ allowance – £2,520.
The dividend and personal savings allowance apply after the personal allowance and are calculated using UK, not Scottish, rates. Anything within these allowances still count towards the basic and/or higher rate tax bands.
Capital Gains Tax Exemption – £12,300
Nil Rate Band for Inheritance Tax – £325,000
Residence nil Rate Band – £175,000
The 2021/2022 allowances and basic rate band (20%) are frozen until April 2026.
Tax Rates
Rate Tax Band Income tax rate Dividend tax rate
Starting Rate for Savings £1 – £5,000 0% N/A
Basic rate £1 – £37,700 20% 7.5%
Higher Rate £37,701 – £150,000 40% 32.5%
Additional Rate £150,000+ 45% 38.1%
Higher rate threshold (standard personal allowance + basic rate band) is £50,270.
Non-savings income uses up the starting rate for savings.
National Insurance Contributions
Self-employed and voluntary
Class 2 – Self Employed
Weekly – rate £3.05
Small profit threshold – £6,515
Class 3 – Voluntary
Weekly rate – £15.40
Class 4 – Self Employed
Lower profits limit – £9,568
Upper profit limit – £50,270
National Minimum Wage
18-20 £6.56/hour
21-22 £8.36/hour
23+ £8.91/hour