Call Us Now
01228 882 880
Call Us Now
01228 882 880
PLEASE NOTE: the figures shown below only apply to England, Northern Ireland and Wales. Scottish taxpayers have different rates and bands. For more details, visit https://www.gov.scot/publications/scottish-income-tax-2020-2021.
The income tax Personal Allowance for the year 2020/2021 is £12,500 (2019/2020 - £12,500). If your total income is less than this during the tax year, you have no tax to pay.
Tax rates 2020-21: Income Tax Personal Allowances
2020 / 2021 | 2019 / 2020 | |
---|---|---|
Personal Allowance(1) | £12,500 | £12,500 |
Income limit for Personal Allowance(1) | £100,000 | £100,000 |
Income limit for married couple's allowance(2) | £30,200 | £29,600 |
Maximum amount of Married Couple's allowance for people born before 6 April 1935(3) | £9,075 | £8,915 |
Minimum amount of Married Couple's allowance for people born before 6 April 1935(4) | £3,510 | £3,450 |
Blind Person's allowance | £2,500 | £2,450 |
Transferable Tax Allowance for married couples and civil partners(5) | £1,250 | £1,250 |
Dividend Allowance(6) | £2,000 | £2,000 |
Personal Savings allowance for basic rate taxpayers(7) | £1,000 | £1,000 |
Personal Savings allowance for higher rate taxpayers(7) | £500 | £500 |
(1). This allowance is subject to the £100,000 income limit. The individual’s personal allowance is reduced where their income is above this limit. The allowance is reduced by £1 for every £2 above the limit.
(2). This age-related allowance is reduced by £1 for every £2 of income above this limit
(3). This allowance is subject to the £30,200 income limit. The individual’s married couple’s allowance is reduced by £1 for every £2 above the limit. That reduction only applies after any reduction to their personal allowance (see note 1). The individual’s married couple’s allowance is never reduced below the minimum amount. Tax relief for the Married Couple's Allowance is given at the rate of 10%.
(4). This is also the maximum relief for maintenance payments where at least one of the parties is born before 6 April 1935.
(5). 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 rate, can transfer this amount of their personal allowance to their spouse or civil partner. The recipient must not be liable to income tax at the higher or additional rate. The recipient is eligible to a tax reduction of 20% of the transferred amount.
(6). Individuals will not have to pay tax on the first £2,000 of dividend income they receive.
(7). Basic rate taxpayers will not have to pay tax on the first £1,000 of savings income they receive and higher rate taxpayers will not have tax to pay on their first £500 of savings income.
Income tax bands and rates 2020-2021
2020 / 2021 | 2019 / 2020 | |
---|---|---|
Starting rate limit for savings(8) | £0 - £5,000 | £0 - £5,000 |
Starting rate for savings income(8) | 0% | 0% |
Basic rate band | £1 - £37,500 | £1 - £37,500 |
Basic rate | 20% | 20% |
Higher rate band | £37,501 - £150,000 | £37,501 - £150,000 |
Higher rate | 40% | 40% |
Additional rate band | Over £150,000 | Over £150,000 |
Additional rate | 45% | 45% |
(8). If, after deducting your Personal Allowance from your total income liable to Income Tax, your non-savings income is above the starting rate limit then the starting rate for savings will not apply. Non-savings income includes income from employment, profits from self-employment, pensions, income from property and taxable benefits.
The rates available for dividends are the 7.5 per cent ordinary rate, the 32.5 per cent dividend upper rate and the dividend additional rate of 38.1 per cent.
The self-employed can claim business expenses against their income. So make sure you include all possible justifiable business expenses on your self-assessment form. This also applies to capital allowances for expenditure on plant and equipment, including computers and tools, for example, used for your business.
It is worth remembering you may be able to pay further contributions to your pension, which can utilise unused tax relief.
Since its introduction in 1990, Gift Aid allows taxpayers to receive tax relief on gifts made to qualifying charities.
One other point to remember is if one spouse is a tax payer and the other is not or pays tax at a lower rate it is worth considering switching certain investments to take advantage of their unused tax allowances.
For further information about the 2020 Budget changes please click here.
INFORMATION IS BASED ON OUR CURRENT UNDERSTANDING OF TAXATION LEGISLATION AND REGULATIONS. ANY LEVELS AND BASES OF, AND RELIEFS FROM TAXATION, ARE SUBJECT TO CHANGE.
THE FINANCIAL CONDUCT AUTHORITY DOES NOT REGULATE TAX PLANNING.
TAX TREATMENT IS BASED ON INDIVIDUAL CIRCUMSTANCES AND MAY BE SUBJECT TO CHANGE IN THE FUTURE.
Value | Move | % |
FTSE 100 | ||
6720.65 | -15.06 ![]() |
-0.224 ![]() |
FTSE 250 | ||
20639.34 | 23.75 ![]() |
0.115 ![]() |
FTSE 350 | ||
3824.63 | -6.29 ![]() |
-0.164 ![]() |
FTSE All Shares | ||
3798.3 | -5.45 ![]() |
-0.143 ![]() |
Dow Jones | ||
30814.26 | -177.24 ![]() |
-0.572 ![]() |
Nasdaq | ||
12998.502 | -114.098 ![]() |
-0.87 ![]() |
Wealth, just like your health, must be carefully preserved. Your assets need to be protected against the potential threats of erosion by taxation, the effects of inflation and investment risks. ...
Read moreMost of us face being taxed on our income, our capital gains, and in some circumstances the value of our estate when we die. Taxation can be very complicated and the rules, reliefs and allowances ... ...
Read moreWhen someone talks about savings and saving money, it could be referring to a piggy bank or a high interest deposit account. Savings are effectively cash or cash instruments ... ...
Read moreWhen you retire you still need food and shelter as an absolute minimum, but of course you will want to maintain the lifestyle to which you have become accustomed ... ...
Read moreYour mortgage is probably the largest financial transaction and commitment you are likely to undertake. Surely then you should seek mortgage advice which is individually tailored ... ...
Read moreThe main purpose of Life Assurance is to provide money for those people who may depend on you financially, in the event that something should happen to you. ...
Read moreHealth Insurance is probably one of the most important types of insurance you can own. Without it, an illness or accident can have serious long-term financial implications for you and your family. ...
Read moreThis is an area of financial planning that is often overlooked. Traditionally, we have our buildings and contents insurance with our mortgage lenders, which may be uncompetitive ... ...
Read moreProfessional Financial Planning is the process which aims to help you realise your ambitions - whatever they may be. As professional financial advisers we can help you make informed decisions ... ...
Read moreIf you're over the age of 55, equity release offers you a way to use the value of your home to raise money. There is a range of equity release schemes available on the market offered by ...
Read moreCurrencies
Value | Move | % |
GBP/EUR | ||
1.12487 | 6.997585E-5 ![]() |
0.0062211817 ![]() |
GBP/NOK | ||
11.66991 | 0.025410652 ![]() |
0.21822022 ![]() |
GBP/SEK | ||
11.3999 | 0.0057001114 ![]() |
0.050026428 ![]() |
GBP/USD | ||
1.3586587 | 0.00031375885 ![]() |
0.02309617 ![]() |
CONTACT US
CMD Financial Solutions Ltd
39 Lowther Street
Carlisle
Cumbria
CA3 8EP
T: 01228 882 880
F: 01228 882 889
Email Us
CMD Financial Solutions Ltd is an appointed representative of Openwork Limited, which is authorised and regulated by the Financial Conduct Authority. Openwork Limited is entered on the Financial Services Register (www.fca.org.uk/register) under reference 408285.
The information on this website is subject to the UK regulatory regime and is therefore targeted at consumers based in the UK.
Registration Address: 39 Lowther Street, Carlisle, Cumbria CA3 8EP
Registration number: 06650508 - Registered in England & Wales
© Copyright 2021 - WEBPRO Adviser - All Rights Reserved