Changes to some tax and National Insurance rates and bands

Some of the rates and bands have been frozen, while others have increased. Here are the rates and bands that will come into effect on 6th April:

England, Northern Ireland and Wales

2020/21 2019/20
Personal allowance £12,500 £12,500
Employee’s NI becomes due at £9,500 £8,632
Employer’s NI becomes due at £8,788 £8,632
Higher rate tax becomes due at £50,000 £50,000
Class 2 NI becomes due when profits exceed £6,475 £6,365
Class 2 NI per week £3.05 £3.00
Class 4 NI becomes due when profits exceed £9,500 £8,632

Scottish Tax Rates and Bands

The Scottish rates of income tax will change to the below on 11th May 2020.

2020/21 2019/20
Personal allowance £0 – £12,500 £0 – £12,500
Starter rate 19% £12,501 – £14,585 £12,501 – £14,549
Basic rate 20% £14,586 – £25,158 £14,550 – £24,944
Intermediate rate 21% £25,159 – £43,430 £24,945 – £43,430
Higher rate 41% £43,431 – £150,000 £43,431 – £150,000
Top rate 46% Over £150,000 Over £150,000

Employment Allowance Increased

The Employment Allowance will increase from £3,000 to £4,000 on 6th April but from this date, only businesses with an employer’s NI liability of under £100,000 a year will be eligible to claim the allowance.

National Minimum Wage / National Living Wage rates per hour increased

The following rates will all increase on 6th April:

2020/21 2019/20
Employees aged 25 and over: NLW £8.72 £8.21
Employees aged under 18: NMW £4.55 £4.35
Employees aged 18-20: NMW £6.45 £6.15
Employees aged 21-24: NMW £8.20 £7.70

Student Loan Income thresholds

The levels of income above which student loan repayments are due will change on 6th April as follows:

2020/21 2019/20
Undergraduate loan: plan 1 £19,390 £18,935
Undergraduate loan: plan 2 £26,575 £25,725
Postgraduate loan £21,000 £21,000

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