We are approaching the start of the new tax year (6th April 2021). Each tax year comes with changes made by the UK and devolved governments. These governments have now announced changes, but we are keeping on top of these as they are subject to confirmation at the budget or parliamentary approval for Scotland and Wales. This article will walk you through what these changes are and the updates we will be making to our product to support these.
QuickBooks Payroll will be updated soon to reflect tax changes for the tax year 2021/22.
NOTE: Advanced payroll customers can, but should not access the new payroll year, 2021/22, until the tax tables are updated.
Tax thresholds, rates and codes
England and Northern Ireland
| PAYE tax rates and thresholds | 2021 to 2022 |
|---|---|
| Employee personal allowance | £242 per week £1,048 per month £12,570 per year |
| English and Northern Irish basic tax rate | 20% on annual earnings above the PAYE tax threshold and up to £37,700 |
| English and Northern Irish higher tax rate | 40% on annual earnings from £37,701 to £150,000 |
| English and Northern Irish additional tax rate | 45% on annual earnings above £150,000 |
Income Tax rates and thresholds are subject to confirmation at the budget.
Scotland
| PAYE tax rates and thresholds | 2021 to 2022 |
|---|---|
| Employee personal allowance | £242 per week £1,048 per month £12,570 per year |
| Scottish starter tax rate | 19% on annual earnings above the PAYE tax threshold and up to £2,097 |
| Scottish basic tax rate | 20% on annual earnings from £2,098 to £12,726 |
| Scottish intermediate tax rate | 21% on annual earnings from £12,727 to £31,092 |
| Scottish higher tax rate | 41% on annual earnings from £31,093 to £150,000 |
| Scottish top tax rate | 46% on annual earnings above £150,000 |
Income Tax rates and thresholds are subject to parliamentary approval.
Wales
| PAYE tax rates and thresholds | 2021 to 2022 |
|---|---|
| Employee personal allowance | £242 per week £1,048 per month £12,570 per year |
| Welsh basic tax rate | 20% on annual earnings above the PAYE tax threshold and up to £37,700 |
| Welsh higher tax rate | 40% on annual earnings from £37,701 to £150,000 |
| Welsh additional tax rate | 45% on annual earnings above £150,000 |
Income Tax rates and thresholds are subject to parliamentary approval.