Business Debt Service: Tax Sheet 2021 - 22

11 April 2019 15:49
  • Business Debt Factsheets
Personal Allowance rates for 2021/22
Personal Allowances 2020/21 2021/22
Personal allowance (1) 12,500 12,570
Income Limit For Personal Allowance (2) 100,000 100,000
Income Limit for Married couples allowance (3) 30,200  
Married couple’s allowance (maximum allowance) (4) 9,075 9,125
Married couple’s allowance (minimum allowance) (5) 3,510 3,530
Blind Person’s Allowance 2500 £2,520
  • (1)(2) Since 2016/17 everyone is entitled to the same personal allowance and income limit, irrespective of age.
  • (3) These allowances reduce where the income is above the income limit by £1 for every £2 of income above the £30,200 limit.
  • (3) Tax relief for the Married Couple’s Allowance is given at the rate of 10 percent.
Income Tax Rates and Bands
Income Tax Rates and Bands 2020/21 2021/22
Basic rate 20% 0 - 37,500 0 - 37,700
Higher rate 40% 37,501 - 150,000 37,701 to £150,000
Additional rate 45% Over 150,000 Over 150,000

 

National Insurance Contributions for Sole Traders
National Insurance Contributions for Sole Traders 2020/21 2021/22
Class 2 3.05 per week 3.05 per week
Class 2 - Small earnings exemption 6475 per annum 6515 per annum
Class 4 - Lower profits limit 9501 per annum 9568 per annum
Class 4 - Upper profits limit 50000 per annum 50270 per annum
Rate between upper and lower profits limit 9% 9%
Rate above upper profits limit 2% 9%

 

Calculation of estimated monthly tax 2020/2021

This can be used as a guide to how much you need to put aside for tax and national insurance within your business and household budget. There is an example on page 3/4 of this fact sheet. There is no provision for Additional Rate if income is greater than £150,000 (taxed at 45%) - please speak to an accountant.

Your monthly business income or ‘drawings’   A  
Multiply by 12 to get the annual figure   B  
Tax allowance (refer to personal allowances)   C  
Taxable amount (B-C)   D  
First £37,701 of D x 20%   E  
D - £37,701 (if answer is greater than 0) x 40%   F  
E + F = estimated tax liability   G  
Divide G by 12 to get monthly amount   H  
The calculated figure in H is your ‘estimated monthly Income tax amount’      

 

 

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Last updated:
22 June, 2021