Income tax rates and thresholds 2021/22
The income tax thresholds and allowances have been set 2021/22. Tax rates for Scotland have been announced, and the rest of the UK tax rates are subject to parliamentary approval.
Replies (10)
Please login or register to join the discussion.
The Scots do love their wacky band widths
And the sheer joy of a lower rate saving nearly £21PA
40p per week
Older practitioners, and I include myself among them, might well ponder on the fact that we would never keep on top of these complex rates without computerisation. I well recall completing forms 930 to work out the allocation of income across the tax bands (for younger readers the form was more or less a hard copy version of a grid / spreadsheet).
I can't help but wonder whether computerisation encourages this complexity.
I think the current complexity is almost entirely driven by "dont worry the computer will do it" thinking from the top.
I've just dug out the oldest tax card I can find, for 1976/77.
Personal Allowance £735
Basic rate on the first £5,000 at 35%, then
£500 at 40%
£1,000 at 45%
£1,000 at 50%
£1,000 at 55%
£1,500 at 60%
£2,000 at 65%
£3,000 at 70%
£5,000 at 75%
The rest at 83%
and an investment income surcharge of 15% (up to 98% total) on interest, dividends etc over £2,000.
In the words of four yorkshiremen, You try telling the young people of today that, they won't believe you.
Of course NI was only EE 5.75%, ER 8.75% and VAT was 8% or 12.5% for luxury items. There was a top rate allowance for dependent children rather than child benefit taken away for high? earners and no student loans to be repaid.
The effect of successive chancellor's magic reductions in income tax while bumping up NI is to leave well off pensioners paying less and the need for IR35.
98% was clearly ludicrous though.
Back in the 98% tax days, I had a posh client, Lady something or other, who would always tip a taxi driver or porter with 2p, saying "There's a pound my man, less tax"!
And said Lady something, if married, wasn't even a taxpayer!
It was also the time when married women had no personal rights at all and it was not the custom for women to go out to work. They were then, as they are still, classed for Income Tax or tax purposes with lunatics and imbeciles.
I had a client at that time who had lent his daughter a fair sum of money and he asked me what interest he should charge. He was a 98% taxpayer and I told him a case of port a year.
Pointless fragmentation of the tax system for little to no gain.
I wonder how much public money is wasted paying people to come up with this rubbish.