Chancellor, Rishi Sunak, has made the following announcements today:
Income Tax
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- The Personal Allowance will be increased to £12,570 as planned next year but will remain at that level until 2026
- Income tax rates will remain the same until 2026.
- For higher-rate taxpayers in England, Wales and Northern Ireland, the threshold will be £50,270 from next year as planned but will be frozen until 2026
- As income tax is a devolved tax, the Scottish rates of income tax differ and were set in the Scottish Budget on 28 January 2021. Please click here for more details.
- The higher rate tax band of £50,270 for saving and dividend income will apply UK wide.
- Starting Rate for Savings Tax - the band of savings income that is subject to the 0% starting rate tax will remain at its current level of £5,000 for 2021/2022
National Insurance
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- There will be no increase to the rates of National Insurance
Capital Gains Tax
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- The current capital gains tax exemption for individuals and Personal representatives of Estates of £12,300 will remain frozen at this level until 2026
- Trustees are entitled to a Capital Gains Tax annual exempt amount of £6,150.
Individual Savings Accounts (ISA)
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- The adult ISA annual subscription limit for 2021/2022 will remain unchanged at £20,000
- Junior ISA and child Trust fund annual subscription limit
- The annual subscription limit for junior ISA and child Trust funds for 2021/2022 will remain unchanged at £9,000
Corporation tax
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- Currently, 19% and will rise to 25% in 2023 for companies with profits over £250,000
- A small profit rate of 19% for companies with turnover below £50,000 will be introduced
- A tapering of this 19% rate for companies with profits over £50,000 up to £250,000
VAT
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- The VAT registration threshold will remain at £85,000 until 2024.
Property Taxes
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- Stamp Duty cut will continue until the end of June, with the nil rate band set at £500,000
- From the end of June up until the end of September the nil rate bad will be set at £250,000
- From 1 October 2021, the Stamp Duty rates will revert to the original nil rate band of £125,000
- This is a devolved tax therefore, please click here to view our Scottish Budget update for the property taxes that relate to Scotland
Inheritance tax
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- The Inheritance Tax nil rate band threshold will remain at the current level of £325,000 until 2026
- The residence nil-rate band will continue at £175,000
- The residence nil-rate band taper will continue to start at £2 million
- Qualifying estates can continue to pass on up to £500,000 and the qualifying estate of a surviving spouse or civil partner can continue to pass on up to £1 million without an Inheritance Tax liability.
Pension Contributions
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- The lifetime allowance will remain at its current level of £1,073,100 until April 2026.
Murray Beith Murray, Edinburgh
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