Everything you need to know about the personal tax and National Insurance allowances in the April 2021 Budget. 

From 6th April 2021 

Personal allowance increased to £12,570. 
Higher rate threshold extends to £50,270. 
Personal savings allowance remains: 
- Basic rate tax payers £1,000 
- Higher rate tax payers £500. 
Dividend allowance remains at £2,000. 
Personal allowance continues to be reduced by £1 for every £2 of income above the £100,000 limit. 
Transferrable marriage allowance increased to £1,260. 
Income tax rate and thresholds on non-savings, non-dividends income for Scottish/Welsh taxpayers will be set by Scottish and Welsh Parliaments. 
Budget announced 
Until 5 April 2026: 
Personal allowance frozen at £12,570. 
Higher rate threshold frozen at £50,270. 
Although this technically isn’t an increase in income tax, there will be an increase in tax take, in real terms, over the coming years. 

National Insurance - Tax Rates and Bands 

Class 1, from 6 April 2021 
The primary threshold increased from £183 to £184 per week. This is the amount at which an employee is required to make contributions and equates to £9,568 per year. 
The secondary threshold increased from £169 to £170 per week. 
This is the amount at which an employer is required to make contributions and equates to £8,840 per year. 
The upper earnings limit increased from £962 to £967 per week or £50,270 annually and this is the same for both employee and employer. 
Rates remain unchanged for employees are 0% up to primary threshold, 12% for earning between primary threshold and upper earnings limit and 2% for income over that. 
Rates remain unchanged for employers too and are 0% up to secondary threshold and 13.8% for income over that. 
Employment allowance (per employer) remains at £4,000 per year, but for smaller businesses only (i.e.- Employers with an NI bill of £100,000 or more in the previous year will not be able to claim it.) 
Class 2 
The threshold at which you will be required to make Class 2 contributions has increased on 6 April 2021 from £6,475 to £6,515. 
The weekly rate remains at £3.05 per week. 
This can be paid voluntarily if you are self employed in order to claim another year for state benefit purposes and is cheaper than making Class 3 voluntary contributions which are now £15.40 per week. 
Class 4 
From 6 April 2021 Lower limit increased from £9,500 to £9,568. 
From 6 April 2021 Upper limit increased from £50,000 to £50,270. 
The rates remain unchanged and are 9% for profits between Lower limit and upper limit and 2% above the upper limit. 

Personal Allowances 

Salary (assumes 2% pay rise) 
Less: personal allowance 
Taxable Income 
Tax due @ 20% 
Employee’s NIC due @ 12% on salary less threshold 
Effective rate of tax and NIC 
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