2021/22 income tax personal allowances to increase

Feb 15, 2021

In advance of Budget Day next month on Wednesday 3 March, legislation has been published which confirms that the personal allowance for 2021/22 will increase from £12,500 to £12,570 and the basic rate limit will increase from £37,500 to £37,700. Several other tax measures are also set to change.

A draft statutory instrument was published last month which sets out that the position in respect of some National Insurance rate including that the small profits threshold will increase from £6,475 to £6,515.

In a written statement to parliament, the Exchequer Secretary to the Treasury has confirmed that the van benefit charge and fuel benefit charges for cars and vans will be uprated in line with the Consumer Price Index from 6 April 2021. The van benefit charge will increase from £3,490 to £3,500, while the van fuel benefit charge will increase from £666 to £669. The car fuel benefit charge multiplier will increase from £24,500 to £24,600. Legislation to implement the changes will be laid before parliament next month.