Tax Rates For 2022
We bring you all the tax rates and allowances for the new tax year that could impact on your personal finances.
Read our Ultimate Guide to the New Tax Year
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We bring you all the tax rates and allowances for the new tax year that could impact on your personal finances.
Read our Ultimate Guide to the New Tax YearThe figures in brackets are the difference in £s from the previous tax year 2020/21
1. Personal allowance: £12,570 (+£70)
2. Income limit for personal allowance: £100,000 (£0)
3. Income limit for couple’s allowance: £30,400 (+£200)
Where income is above £100,000 the Personal Allowance reduces by £1 for every £2 of income above the £100,000 limit. This reduction applies irrespective of date of birth. The Income limit for married couple’s allowance is an age-related allowance. It is reduced by £1 for every £2 of income over this limit.
The figures in brackets are the difference in £s from the previous tax year 2020/21
MARRIAGE ALLOWANCE
This transferable allowance is available to married couples and civil partners who are not in receipt of married couple’s allowance. A spouse or civil partner who is not liable to income tax, or not liable at the higher or additional rates, can transfer this amount of their unused personal allowance to their spouse or civil partner. The recipient must not be liable to income tax at the higher or additional rates.
The relief for this allowance is given at 10%.
PERSONAL SAVINGS ALLOWANCE
PENSION TAX RELIEF
The annual allowance is reduced by £1 for every £2 of adjusted income over £240,000 to a minimum of £4,000, subject to threshold income being over £200,000
CAPITAL GAINS
ADDITIONAL ALLOWANCES
These figures apply to non-dividend income, including income from savings, employment, property or pensions.
Basic Rate 20%: £1 to £37,700
Higher Rate 40%: £37,701 to £150,000
Additional Rate 45%: Over £150,000
Currently there will be no changes on these rates or bands until the 2025/26 tax year.
SAVINGS INCOME
These figures apply to savings income for 2021 to 2022. Starting rate limit for savings is £5,000
DIVIDEND INCOME
Dividend rates apply to dividend income received above the £2,000 tax-free Dividend Allowance
DEFAULT RATES
Default tax rates apply to non-savings and non-dividend income of any taxpayer that is not subject to either the main rates or the Scottish rates of income tax.
TRUSTEES’ INCOME
If you want to understand how to save for your children and grandchildren or how to design your own investment strategy in place don’t hesitate to take a look at one of our financial planning guides, especially the one about planning your finances for the new tax year.
The Government will use the September Consumer Price Index (CPI) figure (0.5%) as the basis for setting all National Insurance limits, thresholds and rates for 2021-22.
NICs rate employee: 12%
NICs rate employer: 13.8%
Most taxable employee benefits: 13.8%
Lower earnings limit: £6,240/year
Primary threshold: £9,568/year
Secondary threshold: £8,840/year
Upper earnings limit: £50,270/year
Upper secondary threshold for under 21s: £50,270/year
Apprentice upper secondary threshold for under 25s: £50,270/year
The figures in brackets are the difference in £s from the previous tax year 2020/21
CLASS 2
CLASS 3
Covers gaps in a person’s NIC record found on the personal tax account where you will need to pay voluntary contributions. The rate increases from £15.30 to £15.40 in 2021/22.
The figures in brackets are the difference in £s from the previous tax year 2020/21
CLASS 4
If self-employed profits are higher than the lower profits limit (LPL) class 4 NIC will be payable.
You can read the government’s more detailed description of all the rates and thresholds for NIC
Rate for estates: 40%
Reduced rate for estates leaving 10% or more to charity: 36%
Rate for chargeable lifetime transfers: 20%
Nil-rate band limit: £325,000
Residence nil-rate band limit: £175,000
Taper threshold for residence nil-rate band: £2,000,000
CAPITAL GAINS RATES ON ASSETS
CAPITAL GAINS RATES ON PROPERTY
GAINS SUBJECT TO BUSINESS ASSET DISPOSAL
LIFETIME LIMIT ON QUALIFYING GAINS
GAINS SUBJECT TO INVESTORS’ RELIEF
LIFETIME LIMIT ON QUALIFYING GAINS
Stamp duty rates are quite confusing at the moment. Until the 30th June 2021 the special stamp duty rate still applies.
Stamp duty rate from 1st July 2021 to 30th September 2021
£0 to £500,000
Main residence: 0% of the value of property
Additional property: 3% of the value of property
£500,000 to £925,000
Main residence: 5% of the value of property
Additional property: 8% of the value of property
£925,000 to £1.5m
Main residence: 10% of the value of property
Additional property: 13% of the value of property
Over £1.5m
Main residence: 12% of the value of property
Additional property: 15% of the value of property
1st JULY 2021 TO 30th SEPTEMBER 2021
£0 to £250,000
£250,000 to £925,000
£925,000 to £1.5m
Over £1.5m
1st OCTOBER 2021 ONWARDS
£0 to £125,000
£125,000 to £250,000
£250,000 to £925,000
£925,000 to £1.5m
Over £1.5m
If you are a first time buyer: from the 1st July you will pay no stamp duty on a property under £300,000. From £300,000 upwards you will pay the same amount as everybody else.
If you are a non-UK resident: you will be required to pay different stamp duty rates, you can read additional information about all stamp duty land tax rates on the government’s website
It isn’t easy getting your head around tax. As you can see taxes on savings, investments and earnings all come with bands, reliefs, allowances and exemptions. How you apply these to your own personal situation is even trickier, especially if you want to make the most of your money. Sometimes when things get hard to understand we resort to leaving cash in the bank but this impacts on its value. Knowing how to maximise your tax efficiency plays an important role on your finances, whether you have good money habits or not. If you want to take your financial strategy to the next level you can read one of our financial planning guides or get in touch with one of our financial planners who can give your finances an MOT and recommend next steps.
