Yesterday marked the beginning of the new tax year, which is set to be a busy one with many legislation and business changes coming into effect!
As last month’s budget feels a long time ago already, we have summarised the important changes which might affect you and/or your business.
Personal allowance and tax thresholds
The personal allowance is rising from £12,500 to £12,570 from 6 April.
The higher rate tax bracket will now rise from £50,000 to £50,271.
The income tax bands for the 2021/22 tax year are as follows:
National Minimum and Living Wage
There are increases in the minimum wage rates you must pay to employees as of April 2021. In addition to this, in the 2021/22 tax year, National Living Wage has been expanded to start at the age of 23, instead of the previous limitation being aged 25 and above.
As of 1 April 2021, the rates for minimum and living wage are as follows:
Statutory sick pay (SSP) will rise to £96.35 as of 6 April 2021 from £95.85.
Statutory Maternity Pay (SMP), SPP (Statutory Paternity Pay), SAP (Statutory Adoption Pay), ShPP (Statutory Shared Parental Pay) and SPBP (Statutory Parental Bereavement Pay) will all increase from £151.20 to £151.97 as of 6 April 2021.
National Insurance Thresholds
Class 1 & Class 4 National Insurance thresholds have increased to £9,568.
Class 2 Small profits thresholds have increased to £6,515.
Just a note to add, following the personal tax allowance increase, it has been confirmed that the Inheritance tax thresholds, Capital gains tax annual exempt amounts and Pensions lifetime allowance and are all frozen until April 2026.
The VAT Rates for 2021/22 also have not changed, the thresholds will all still remain the same until 1 April 2024.
There are additional changes for the new tax year from the budget 2021, in relation to Coronavirus financial support. For more information on the changes, visit here.
If you have any questions regarding the new tax year changes for your business, contact us at firstname.lastname@example.org. We would be more than happy to help!