UK self employed tax rates 2020/21 – at a glance!

The 2020/21 tax year in the UK runs from 6th April 2020 to 5th April 2021. Tax returns for this tax year are generally due by 31st January 2022. Here are some of the most common at-a-glance figures you might find useful for the next tax year.

I’m updating this on 5th January 2020 and as year we haven’t had a budget for the next tax year. I’ve never known a budget happening so late but it’s all due to delays caused last year by the UK Parliament. The budget should be taking place in February 2020 at which point we’ll have a better idea of what’s going on. A lot of figures such as the UK personal allowance and VAT registration threshold are unlikely to change anyway. At the moment the below figures are just guesswork so please don’t rely on them for anything important!

2020/21 Tax Rates for Self Employed in the UK

  • Tax Year:  6th April 2020 to 5th April 2021
  • Tax Return Deadline:  31st January 2022
  • Personal Allowance:  £12,500 (TBC)
  • Basic Tax Rate:  20% (£12,501-£50,000) – TBC
  • Higher Tax Rate:  40% (£50,001-£150,000) – TBC
  • Personal Savings Allowance:  £1,000 (visit this page) – TBC
  • Trading Allowance:  £1,000 (visit this page) – TBC
  • Property Allowance:  £1,000 (visit this page) – TBC

2020/21 National Insurance Rates for Self Employed in the UK

  • Class 2 Small Profits Threshold: £6,365 – Likely to change
  • Class 2 Rate per week:  £3.00 – Likely to change
  • Class 4 Lower Profits Threshold: £8,632 – Likely to change
  • Class 4 NI Rate: 9% – Probably won’t change
  • Class 4 Rate above £50,000: 2% – Probably won’t change
  • For full details and past rates visit this page

Other useful information for self employed in 2020/21 tax year

  • VAT threshold:  £85,000 turnover – Probably won’t change
  • Standard VAT rate:  20% – Probably won’t change
  • Annual Investment Allowance:  £1m – Probably won’t change
  • Cash Basis Limit:  £150,000 turnover (visit this page)
  • Payment on Account threshold: £1,000 total tax bill (visit this page)
  • State Pension Age: 67 (visit this page)
  • Qualifying Years Required for Full State Pension: 35 (visit this page)

Please note that the above information is just intended as an ‘at-a-glance’ quick summary summary. Please visit the relevant links for full details. You should always seek professional guidance from a qualified accountant.

Andy Mac