Summary
Description
NOTE: To find legislation for the current 2021/2021 tax year, you can visit our help guide. Read more
To ensure you're using the correct legislation for the 2020/21 tax year, you need to ensure you're using v26.01 or above.
If necessary, you can also view the legislation for the 2019/2020 tax year.
Resolution
Personal allowance
The personal allowance for income tax remains at £12,500 for the 2020/2021 tax year.
Tax bands and rates
England and Northern Ireland
The bands remain the same from 6 April 2020.
Bandwidth | From | To | Rate (%) | Basic Rate Band |
---|---|---|---|---|
37,500.00 | 0.01 | 37,500.00 | 20.00 | Yes |
112,500.00 | 37,500.01 | 150,000.00 | 40.00 | No |
excess | 150,000.01 | excess | 45.00 | No |
For example, the table below shows the UK Income Tax rates an employee pays in each band, if the employee has a standard Personal Allowance of £12,500.
Band | Taxable income | UK tax rate (%) |
---|---|---|
Personal allowance | Up to £12,500 | 0% |
Basic rate | £12,501 to £50,000 | 20% |
Higher rate | £50,001 to £150,000 | 40% |
Additional rate | over £150,000 | 45% |
Wales
A Welsh taxpayer's tax code is the same as a England and Northern Ireland tax code, but is prefixed with an C. For example, C1250L.
Bandwidth | From | To | Rate (%) | Basic Rate Band |
---|---|---|---|---|
37,500.00 | 0.01 | 37,500.00 | 20.00 | Yes |
112,500.00 | 37,500.01 | 150,000.00 | 40.00 | No |
excess | 150,000.01 | excess | 45.00 | No |
Scotland
A Scottish taxpayer's tax code is the same as a England and Northern Ireland tax code, but is prefixed with an S. For example, S1250L.
The table below shows the Scottish Income Tax rates an employee pays in each band, if the employee has a standard Personal Allowance of £12,500.
Threshold | From 06/04/2020 | From date to be confirmed |
---|---|---|
Starter rate - 19% | 1 - 2,049 | 1 - 2,085 |
Basic rate - 20% | 2,050 - 12,444 | 2,086 - 12,658 |
Intermediate rate - 21% | 12,445 - 30,930 | 12,659 - 30,930 |
Higher rate - 41% | 30,931 - 150,000 | 30,931 - 150,000 |
Top rate - 46% | Over 150,000 | Over 150,000 |
NI bands and rates
The new earnings thresholds for category A (Standard Rate Contributions) are effective from 6 April 2020.
Earnings Limit | Weekly | Monthly | Yearly |
---|---|---|---|
Lower Earnings Limit (LEL) | 120.00 | 520.00 | 6,240.00 |
Primary Threshold (PT) | 183.00 | 792.00 | 9,500.00 |
Secondary Threshold (ST) | 169.00 | 732.00 | 8,788.00 |
Upper Earnings Limit (UEL) | 962.00 | 4,167.00 | 50,000.00 |
Upper Secondary Threshold (UST) | 962.00 | 4,167.00 | 50,000.00 |
Apprentice Upper Secondary Threshold (AUST) | 962.00 | 4,167.00 | 50,000.00 |
You can find information for other NI categories, from our support guide. Read more >
Statutory payments
From 6 April 2020 the statutory sick pay (SSP) rate is £95.85 per week.
The 2020/2021 rates for statutory maternity pay (SMP), statutory paternity pay (SPP), statutory paternity pay adoption (SPP(A)), shared parental pay (ShPP) and statutory adoption pay (SAP):
Payment | Minimum weekly earnings £ | Higher rate % | The standard rate is the lesser of | |
---|---|---|---|---|
£ | % | |||
SMP | 120.00 | 90.00 | 151.20 | 90.00 |
SPP, SPP(A) and ShPP | 120.00 | N/A | 151.20 | 90.00 |
SAP | 120.00 | 90.00 | 151.20 | 90.00 |
Employment allowance
The employment allowance increases to £4,000 for the 2020/2021 tax year. From 6 April 2020 you will only be able to claim if your Class 1 National Insurance bill was below £100,000 in the previous tax year.
Student loans
When you set up a student loan deduction for an employee, you must specify whether they're on Plan 1 or Plan 2.
Type | Weekly £ | Monthly £ | Annual £ | Rate % |
---|---|---|---|---|
Plan Type 1 | 372.88 | 1,615.83 | 19,390.00 | 9.00 |
Plan Type 2 | 511.05 | 2,214.58 | 26,575.00 | 9.00 |
Postgraduate loans
Type | Weekly £ | Monthly £ | Annual £ | Rate % |
---|---|---|---|---|
Standard | 403.84 | 1,750.00 | 21,000.00 | 6.00 |
National minimum/living wage
The rates changes from 1 April 2020.
Workers aged | Rates from April 2019 | Rates from April 2020 |
---|---|---|
25 years and over | £8.21 | £8.72 |
21 to 24 years | £7.70 | £8.20 |
18 to 20 years | £6.15 | £6.45 |
16 - 17 years | £4.35 | £4.55 |
Apprentice | £3.90 | £4.15 |
To ensure you're using the correct legislation, you must install your payroll year end software updates before 1 April.
For full details about the legislation, please visit the GOV.UK website.