Tax & NIC

Tax and NIC Thresholds for 2021

As a business owner, I’m sure you have been eagerly waiting for the HMRC news on the 2021/22 thresholds for income tax, statutory payments and national insurance contributions (NIC). They are among the few things disrupted by the extraordinary 2020.

HMRC recently published rates to be used when operating payrolls, providing expenses and benefits to employees 2021-22.

They include:

  • PAYE tax Class 1 National Insurance Contributions
  • Tax thresholds, rates and codes
  • Class 1 National Insurance thresholds
  • Class 1 National Insurance rates
  • Class 1A National Insurance; expenses and benefits
  • Class 1A National Insurance; termination awards and sporting testimonial payments
  • Class 1B National Insurance; PAYE Settlement Agreements
  • National Minimum Wage
  • Statutory Maternity, Paternity, Adoption, Shared Parental and Bereavement Pay
  • Statutory Sick Pay
  • Student loan and postgraduate loan recovery
  • Company cars; advisory fuel rates
  • Employee vehicles; mileage allowance payments

Class 1 2021-2022

In the employer-employee category, the weekly lower earnings still at £120. It is not the case for the upper secondary threshold for under 21s as it rose from £962 in 2020-21 to £967 in 2021-22.

Class 2 2021-2022

We see small profits threshold increasing from £6,475 to £6,515 as weekly rates stay at £3.05 per week.

Class 3 2021-2022

It fills the gaps in a person’s NIC record. To fill personal tax gaps, you may need to pay voluntary contributions. For the 2021/22 period, the weekly rate has increased from £15.30 to £15.40.

Class 4 2021-2022

When self-employed profits are higher than the LPL class 4, NIC will be payable. We find that LPL has increased from £ 9,500 to £9,568 whereas the upper profits limit has increased from £ 50,000 to £ 50,270.

Tax can be complex and as a business owner, you can make mistakes and incur fines in return. Ernest & Co Accountants can help small and medium businesses get it right. Are you worried about VAT returns, corporation tax, and business expenses?

Get in touch with us today.

For more detailed information please click 👉🏾👉🏾👉🏾 Tax & NIC 2021/22

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