Tax rates and allowances
With changes in the tax system now an ever-present feature, our up-to-date experience is available to ensure clients'' tax liabilities are planned to be at a minimum.
The main changes announced for 2020/21 are:
- personal allowance remains the same at £12,500
- basic-rate band is £37,500
- higher-rate threshold remains the same at £50,000
- car fuel benefit multiplier increases to £24,500
- a reduction to 0% benefit in kind for fully electric company car
- van benefit is £3,490
- van fuel benefit is £666
- the lifetime limit for entrepreneurs' relief was reduced from £10m to £1m, for disposals on or after 11 March 2020
- capital gains tax annual allowance increases to £12,300
- residence nil-rate band is £175,000
- national living wage increases from £8.21 per hour to £8.72
- junior ISA allowance and child trust fund limits increase to £9,000
- the adjusted net income limit for the tapering of the annual allowance for pensions increased from £150,000 to £240,000
- the tapered minimum annual allowance for pensions decreased from £10,000 to £4,000
- lifetime pension allowance increases from £1,055,000 to £1,073,100
As a consequence of devolution, several rates may differ between the four countries that make up the UK. Where applicable these rates are shown in each section of these tax rates and allowances.
Business deductions
In order to attract a deduction in computing the profits of a trade or business any expenses must be incurred wholly and exclusively for the purpose of the trade. Capital expenditure is not an allowable expense (capital allowances are claimed on these costs), and certain other expenses are barred by statute.
Penalties for late returns
The tax system has many fines and penalties for those that do not file or pay on time. Make sure you do not become liable to any of these fines or penalties.
Non-domiciled UK resident individuals claiming the remittance basis
The basics of the non-domicile charge.
Green travel allowances
There are a number of schemes intended to encourage employers to make arrangements for their staff to travel to work by more environmentally beneficial means.
Pension premiums
There are limits that may be contributed to a registered pension scheme without incurring a tax charge. The maximum amount on which an individual can claim tax relief in any tax year is the greater of the individual's UK relevant earnings or £3,600.
EIS, SEIS, VCT and SITR
Enterprise investment schemes, seed enterprise investment schemes, venture capital trusts and social investment relief.
Stamp and property taxes
Stamp duty land tax on residential property is charged at different rates depending on the portion of the purchase price that falls within a certain rate band.
Annual tax on enveloped dwellings (ATED)
ATED is a tax payable by companies on high value residential property (a dwelling).